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Stock impact report

5 BDCs That Deliver Double-Digit Yields (Up To 12.6%) [Forbes]

Morgan Stanley Direct Lending Fund (MSDL) 
Company Research Source: Forbes
Forget the “penny yields” most stocks pay. BDCs can dish divvies between 10.6% and 12.6%. Unlike vanilla blue chips, BDCs are mandated by Congress to flip us at least 90% of their taxable income. In other words, the dividends are a “built in” feature. Of course we don't just close our eyes and buy any 12% payer. Some BDCs are dividend machines, others are disasters. Our job: separate the stars from the scrubs and only buy the cash cows. BDCs are basically banks for Main Street . They lend to small and mid-sized companies that can't tap the bond market the way Apple or Microsoft can. These borrowers pay a premium for their capital, which BDCs funnel right back to us as payouts. Most BDC loans float with the Fed. That looks scary with rate cuts coming. But it also brings lower borrowing costs for the BDCs themselves—and relief for the companies they lend to. Healthy borrowers mean stronger dividends. As I recently wrote about Morgan Stanley Direct Lending Fund (MSDL, 11.1% yi Show less Read more
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