There are lots of ways to earn big yield in this market, and the BDC space (business development companies) is ripe with opportunities. And while BDCs come in a wide variety of shapes and sizes (data is shared in this report), one that stands out is Trinity Capital (TRIN) because of its growth-sector niche (arguably better aligned with the “new” US economy), internal management team (less conflicts of interest) and outstanding 14% dividend yield. This report reviews all of that, plus the big risks Trintiy currently faces, and then concludes with my strong opinion on investing.
Top 10 Big Yields Ranked: BDCs, CEFs and Dividend Stocks (Fear Creates Opportunity)
In the market battle of bulls versus bears, fear-and-greed continues to create attractive high-income opportunities (yields of 7-10%+) in specific corners of the market, including business development companies (BDCs), stock-and-bond closed-end funds (CEFs), dividend stocks and more. This report reviews the critical costs and benefits of investing in each of these groups and then counts down (ranks) my top 10 specific big-yield investment opportunities right now (selected from across the groups) as fear is currently creating some very attractive opportunities. Enjoy!
Top 10 Big-Yield CEFs: This PIMCO Fund Stands Out
If you like big steady income (to offset the short-term uncertainty of long-term stock-market investments), closed-end funds (“CEFs”) currently offer a widely-diverse set (ranging from varied stock and bond strategies) of big-yield opportunities (9%+ yields, often paid monthly) to choose from (ranging from those benefiting from market over-reactions to Fed interest rate signaling as well as otherwise-steady utility sector opportunities being whipsawed by AI’s startling demand for energy). This report shares 10 top big-yield opportunities (including a variety of relevant quantitative data and important qualitative commentary) and dives a bit deeper into one contrarian PIMCO bond CEF that is particularly compelling right now. Enjoy!
Main Street Capital: What Bubble?
Investors love to look at Main Street Capital’s relatively high price-to-book value and immediately declare it an overvalued bubble of a Business Development Company (“BDC”). But what many investors don’t realize is it’s a fundamentally different type of BDC with its steady net asset value (“NAV”) gains (while peers stay relatively flat—or worse). So while some thumb their nose at Main Street’s mere 5.3% dividend yield (puny in the BDC space), they fail to recognize the steady dividend growth, plus the powerful supplemental dividends, as well as the many other attractive qualities that set it apart (i.e. low debt, strong liquidity, above-average pipeline, healthy portfolio, efficient operations and macro resilience). This report reviews all of that (and the big risks) and then concludes with my strong opinion on investing.
Top 10 BDCs: Ares Stands Out (Big Yield and Risks)
As the largest publicly-traded Business Development Company (“BDC”), Ares Capital (ARCC) is not only well-positioned to defend its big dividend (current yield is 9.3%) with spillover capital, but it’s also well-positioned with multiple levers for growth (e.g. conservative balance sheet leverage, fees and plenty of deal flow). And despite the big risks (such as falling rates, spread compression and “hidden” liabilities), the latest earnings announcement suggests it continues to present an attractive valuation for long-term income focused investors. This report shares data on 10 top big-yield BDCs, then reviews the details on Ares and concludes with a strong opinion on investing.
Dogs of The Dow: UnitedHealth Group is Attractive
If you are concerned about frothy growth stock valuations, the contrarian “Dogs of The Dow” strategy is something you may want to consider. This report dives deep into the current “dogs” sharing all kinds of data worth considering and then reviews UnitedHealth Group in detail (i.e. one particularly interesting current “Dog of The Dow”). Enjoy!
10 Top Big-Yield CEFs: This 11.1% Yield BlackRock Fund Stands Out
Top 10 BDCs: Contrarian Yield in a Greedy Market
Business Development Companies (BDCs) continue to provide big steady yields (income) to investors despite a challenging BDC environment, including interest rate volatility, increasing competition and economic uncertainty. Although BDC strategies are varied, they generally provide loans to riskier private business where traditional bank lending is less suitable, and then reduce aggregate risks by doing so through a diversified portfolio (within their areas of expertise). Many are facing selling pressure (see 14-day money flow index) and some trade below book value (generally an indication of fear, depending the the particular BDC strategy). Increasingly compelling contrarian yield opportunities in an otherwise greedy market environment.
Big 10.9% Yield Bond CEF: Big Temporary Discount
A lot of investors believe the bond CEF I review in this report is “second rate” compared to PIMCO bond CEFs, but with an impressive BIG (temporary) price decline (and now discount) versus NAV and a 10.9% distribution yield (paid monthly), it’s worth considering (and the management company has massive resources too). In this report, I review the opportunity, including how it generates that big monthly yield, what are the big risks, and then I conclude with my strong opinion on investing.
Attractive BDC: 11.4% Yield, Prints Money at 1.4x NAV
Trading at an attractive 1.4x book value, the BDC I review in this report prints money when it issues new shares (which it does frequently). And the big 11.4% dividend yield is now paid monthly (previously it was quarterly). After reviewing the business, valuation, dividend safety and risks, I conclude with my strong opinion on investing.
SCHD: When the AI Flash Mob is NOT for You
The Schwab US Dividend Equity ETF (SCHD) is increasingly popular (total assets have zoomed to over $70 billion), yet it has significantly underperformed the market (SPY) and especially the tech-heavy Nasdaq 100 (QQQ). This report reviews the SCHD strategy, including its attractive qualities and big risks, and then concludes with my strong opinion on investing.
Compelling 14% Yield CEF: Big Contrarian Discount
If you like big-yield opportunities, trading at discounted prices, the healthcare sector CEF I review in this report is worth considering. It currently offers a 14% yield (paid monthly) and trades at a big contrarian discount (its top holdings are down big, and it trades at a 9% discount to NAV). This report takes a closer look at what is happening here (in terms of fund strategy, valuation and risks) and then concludes with my strong opinion on investing.
Attractive 8% Yield (Min) at a Discounted Price
This public equity (stock market) closed-end fund (CEF) is compelling thanks to its long history (85+ years) of paying big distributions (guaranteed yield is 8%, and 2024 was 10.9%) and its outperformance versus the S&P 500 (see chart below). However before investing, it’s important to understand how the fund is constructed (what are its goals) and why do many investors absolutely “hate” it (they generally have different goals and don’t care to understand the mechanics). After reviewing the details, I conclude with my strong opinion on who may, and who may not, want to invest, and why. Enjoy!
PDI’s 13.8% Yield: Despite Coverage Shortfall, Shares Worth Considering
Just like inflation is a hidden tax on your money, so is return of capital (“ROC”) on your big-yield closed-end fund (“CEF”). For example, PIMCO’s CEFs are particularly impressive and attractive, just not as much so as many people seem to think considering not a single one actually covered its distribution over the last year (see table below). This report shares high-level data on PIMCO’s popular big-yield CEFs, with a special focus on the Dynamic Income Fund (PDI), and then draws a critical conclusion based on the risks and rewards.
Attractive 9.9% Yield BDC, VC/Pre-IPO Growth
One of my biggest concerns for income-focused investors is opportunity cost. Specifically, they often concentrate their nest eggs in lower-growth sectors of the economy (because that’s where the dividends are) and/or in distressed companies (because that’s where the high-yield/junk bonds are at) and thereby sacrifice total returns. However, the internally-managed BDC I review in this report offers a healthy 9.9% dividend yield by investing in growth-focused sectors and companies (by providing financing to them during their early, pre-IPO, venture capital phase). In this report, I review the business, growth, dividend, valuation and risks, and then conclude with my strong opinion on investing.
Attractive BDC: Despite Risks, 14.3% Yield Worth Considering
The BDC I review in this report looks good for its big well-covered distribution, early growth-stage investments (RocketLab, for instance), internal management team, investment grade credit rating and reasonable valuation. Of course there are risks (industry concentration, interest rates, and an increasingly competitive BDC space) but within the constructs of a prudently-concentrated high-income portfolio, it’s absolutely worth considering for investment.
UPS: Despite Big Risks, 6.5% Dividend Yield Worth Considering
Down nearly 20% this year, United Parcel Service (UPS) may look ugly (especially considering revenue is expected to decline), but a closer look reveals a compelling big dividend value play with operational and financial strengths, and despite the big risks. In this report, I review the details and then conclude with my strong opinion on who might want to consider investing.
Novo Nordisk: 3.4% Dividend Yield, Shares Down 50%
Novo Nordisk (NVO) is a global leader in diabetes and obesity care, and its shares are down 50% since peaking in June 2024 (due to competition, pipeline setbacks and political uncertainty). However, the underlying fundamentals appear compelling. This report reviews the business, growth, risks, valuation and capital allocation, and then concludes with my strong opinion on investing.
UnitedHealth Group: Post 50% Decline, Shares Worth Considering
UnitedHealth Group, a stalwart Dow Jones component and important part of the healthcare sector, is trading 50% below recent all-time highs due to operational challenges (they pulled guidance), regulatory scrutiny (the DOJ is probing potential Medicare Advantage fraud) and leadership changes. This report reviews the business, growth, capital allocation, valuation and risks, and then concludes with my strong opinion on investing.
Monolithic Power: Impressive Dividend Growth, Valuation
Monolithic Power Systems (MPWR) presents a particularly compelling investment opportunity. Not only is it an Nvidia AI megatrend beneficiary (enabling energy-efficient semiconductor technologies), but it’s an enormously profitable (~80% net margin), strong-balance sheet, dividend-growth powerhouse that is currently trading at an attractive price. In this report, I review the business, market opportunity, growth, valuation, dividend and risks, and then conclude with my strong opinion on who may want to consider investing, and how.