This 7.5%-Yielding SWAN BDC Remains A 'Strong Buy' For Income Investors

This company is a sleep-well-at-night BDC. It easily covered its dividend with (distributable) net investment income in the last quarter. The BDC started to pay a higher dividend last month. The company has an operating cost advantage compared to other BDCs. Shares are not cheap, but worth the price, in my opinion. An investment in the stock yields 7.5 percent (including special dividends).

Main Street Capital Corp. (MAIN) once again released strong financial results for its third quarter last week. The business development company reported robust growth in its net investment income, and MAIN started to pay a higher monthly distribution last month. Main Street Capital Corp. easily covers its dividend payout with (distributable) net investment income which in turn provides income investors with a high margin of dividend safety. Though MAIN is by far the most expensive stock in the BDC sector, the company produces excellent results, and pays two special dividends each year. An investment in MAIN yields 6.1 percent (excluding special dividends) and 7.5 percent (including special dividends).

Source: Seeking Alpha

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