I Just Sold One of My Favorite High Yield Stocks

My Portfolio: https://www.patreon.com/dividendbull

Up until last week, 2024 had been a pretty good year for the business development company sector. The most popular business development company ETF, ticker BIZD, was up about 4.1% for the year before the selloff. Although that doesn’t sound much, you need to take into account the dividends, which these companies normally yield between 8 and 10% on average. If you took the reinvested dividends into account, you can see BIZD was up almost 10% in the first seven months of the year. This is right around the average return of what the S&P 500 normally sees in a year, and the BDC sector has seen this in just seven months.

This can be attributed to the larger dividends a lot of these companies are still paying while interest rates remain high. If a BDC holds a lot of floating rate debt, then it’s likely that they’ve increased their dividends, or have paid special dividends in the past year. Obviously given the market sell off things have taken a downturn for the time being. But one BDC in particular has been down quite a bit over the past few months, while the majority of the sector had been doing very well. As I’ll go into detail, this company gave a lot of optimism in their Q2 results, which initially motived me to remain invested in them. But what we saw in their most recent results threw a wet blanket on their ongoing issues.


Did you miss our previous article...
https://trendinginrealestate.com/commercial-real-estate/a-practical-guide-to-the-latest-rate-drops