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Our Two Favorite Big-Dividend BDCs

This week’s Weekly covers our two favorite big-dividend Business Development Companies (BDCs). They yield 13% and 10%, respectively. And we own both of them in our Blue Harbinger Income Equity portfolio. They’ve both sold off modestly over the last two months as higher yielding equities in general have sold off, thereby creating a more attractive entry point for long-term income-hungry investors.

2. Prospect Capital (PSEC): 13.3% Yield

Prospect is a closed-end fund, with a big 13.3% yield (paid monthly), the shares have sold off 10.7% since the start of September, and it now trades at a 20% discount to its book value. It also has a healthy dividend coverage ratio, strong investment grade credit ratings, and a well-diversified thriving business. The company will release earnings on November 8th (Election Day), and it has beaten expectations in three of its last four quarterly earnings releases. You can read our full recent report on Prospect here:

1. Triangle Capital (TCAP): 10.5% Yield

Triangle Capital (TCAP) is a internally managed Business Development Company (BDC) with an enormous 10.5% dividend yield. The share price declined sharply last week as Mr. Market did not like earnings (TCAP missed the consensus earnings estimates by $0.03). We view the decline as an attractive opportunity to add shares at a discounted price. You can read our recent full write-up on Triangle here:



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