If you are looking for a high-income opportunity that is attractive on a risk-versus-reward basis, the BDC we review in this article is worth considering. Not only does it offer regular, supplemental and special dividends, but it stands out versus its BDC peers in terms of strong financial metrics and strong deal flow trajectory going forward. It also has support from a larger parent organization, it has significant interest rate hedging (by virtue of its largely floating rate portfolio and debts) and the recent share price pullback makes for an increasingly attractive entry point. In this report, we review the details and conclude with our opinion on investing.
Attractive 8% Plus Yield BDC: Interest Rate Risk Baked In
This big-dividend hidden gem of a BDC may be popular in certain niche investment circles, but if you haven’t considered it previously, it is attractive and worth a closer look. It has many of the important qualities you’d like to see in a BDC (such as internal management, strong NII and a healthy dividend), plus the growing macroeconomic interest rate risks are already baked in—to a significant extent. In this report, we dive into the important details (ahead of its upcoming earnings release on January 31st), and then conclude with our opinion on investing.
This 9.3% Dividend Yield BDC is Worth Considering
The BDC we review in this report offers a stable 9.3% dividend yield. It also has a strong liquidity position and a relatively defensive portfolio (attractive given current macro uncertainty). In this report, we review the business, valuation, dividend safety and risks. We conclude with our opinion on who might want to invest.
New Options Trade: High Upfront Income, Fear Creates Opportunity
High growth stocks have been selling off hard as the market is fearful of the fed’s indication of higher interest rates (as the "pandemic trade" continues to unwind). This has created an attractive opportunity to generate high upfront premium income in the options market. In this report, we share an income-generating options trade on an attractive long-term growth stock that has simply sold off too hard as a result of the market’s latest volatility and fear. In fact, premium income available goes up when short-term fear is high, and that is a big part of the reason why this trade is particularly attractive. We believe this is an attractive trade to place today and potentially over the next few trading sessions as long as the price of the underlying shares doesn’t move too far before then.
Attractive 5.9% Yield CEF: Non-Traditional Income-Sector Exposure
If you like high income, but worry that your portfolio is too concentrated in traditional high-income sectors of the market, then this 5.9% yield (paid monthly) closed-end fund (“CEF”) is worth considering. This particular high-income CEF gives you important diversifying exposure to high-growth sectors (such as technology—a sector traditionally known for low yield), and it also trades at an attractive price. The price is attractive not only for the current discount to NAV, but because the underlying holdings are positioned for long-term gains—which will help the fund continue to pay you big steady income. It also employs a compelling covered-call strategy, it has a relatively low management fee (important!), and it has a rock-solid management company. In this report, we dive into the details.