13.2% Yield At Risk Of Upcoming Dividend Cut

Q2 2018 BDC Reporting Next week, business development companies ("BDCs") will be reporting June 30, 2018, results and I will likely be making changes to my personal portfolio. Last week, I had articles on TPG Specialty Lending (TSLX), Ares Capital (ARCC), and Main Street Capital (MAIN) discussing increased and special dividends. These companies will be reporting results next week.
TSLX: Another Big Win Driving Special Dividends And 9% To 10% Yield ARCC: 9% Dividend Yield Positioned For Rising Rates And Upcoming Special Dividend MAIN: This High-Yielding, Sleep-Well Investment Is About To Announce A Dividend Increase
To be a successful BDC investor: Closely monitor your BDCs, including dividend coverage potential and portfolio credit quality. Identify BDCs that fit your risk profile. Establish appropriate price targets based on relative risk and returns (mostly from regular and potential special dividends). Diversify your BDC portfolio with at least five companies (there are over 50 publicly traded BDCs, please be selective). Be ready to make purchases (or sell) during market volatility and look for opportunistic buying points. As mentioned in the articles linked above, I have been buying additional shares of higher quality BDCs, especially given the oversold conditions driving higher yields. Many BDCs have been rallying over the last three to four months, likely for the reasons discussed in this and previous articles including:
Rising interest rates and... Read more