Monday, April 27, 2026
Recently, the Wall Street Journal published a short piece noting that Moody’s Ratings had lowered its outlook for business development companies (BDCs) from “stable” to “negative.” There are some interesting comments in the article, and I think the downgrade gives investment opportunities. The article glosses over what I think are a couple of important points. […]
Private credit investments are pools of non-publicly traded loans to corporations, in which investors invest and participate in the earnings of a private credit portfolio. These investments are sold through investment advisors who like offering investments that their clients cannot source on their own. In recent months, a fear has gripped investors about the possibility […]
Main Street Capital Corp (MAIN) is arguably the most successful business development company (BDC) for investors. Since its October 2007 IPO, with dividend reinvestment, MAIN has returned 1,900% to investors. That works out to 18% per year, compounded. MAIN Street Capital outperforms its peer BDCs through a combination of dividend growth, supplemental dividend payments, and […]
Fears that a lot of bad debt is lurking in the private lending sector have investors worried about results for business development companies (BDCs). The VanEck BDC Income ETF (BIZD) has fallen 17.5% over the last four months. Even with a double-digit yield, that level of loss is hard to watch. The business of a […]
For more than 20 years, Hercules Capital (HTGC) has produced superior returns for investors. Last week, the business development corporation (BDC) issued a press release celebrating the fact that it had accumulated $25 billion in debt commitments, noting that Hercules is “the largest and leading specialty financing provider to innovative venture, growth, and established stage […]
One big goal of Trump’s tariff scheme is to incentivize companies to bring manufacturing back to the U.S. Setting up new factories in the U.S. will require a lot of capital. Companies won’t pay for the construction out of free cash flow. They will borrow money for infrastructure and construction. Investing in the stocks of […]
Recently, Oaktree Specialty Lending Corp. (OCSL), a business development company (BDC), cut its quarterly dividend by 27%. Usually, a large dividend reduction indicates that you should sell the stock if you own it. In the case of OCSL, however, it’s the opposite. The changes made by the company will make OCSL a better high-yield investment […]
I read a lot of articles analyzing the stocks of business development companies (BDCs). The article authors invariably classify BDCs trading at a premium to book value as too expensive, and the “deals” are the BDCs that trade at a discount to book value or NAV. There are two reasons I believe this is the […]
Main Street Capital (MAIN) usually sports the lowest yield and largest premium to NAV. Investors ask me why I recommend Main Street Capital with such a low yield compared to other BDCs and why I am willing to pay such a premium for the shares. As a start, based on its regular monthly dividend, Main […]
As the Federal Reserve has indicated its willingness to keep interest rates higher for longer, the broader stock market has struggled with predicting the effects of rates staying up and also trying to predict when the Fed will get around to the initial rate reductions. Investors can take advantage of the higher-for-longer meme by investing […]
