PennantPark Investment: 55% Discount To Book Driving 14% Yield

Seeking AlphaDividend IdeasPennantPark Investment: 55% Discount To Book Driving 14% YieldSep. 1, 2020 12:34 PM ET|| About: PennantPark Investment (PNNT), PNNTG, Includes: AINV, ARCC, BKCC, CGBD, CSWC, FCRD, FDUS, FDUSG, FDUSL, FDUSZ, FSK, GAIN, GBDC, GSBD, HTGC, MAIN, NEWT, NMFC, NMFX, OCSL, ORCC, PBB, PBC, PFLT, PSEC, SCM, TPVG, WHFby: BDC BuzzBDC Buzz Sustainable DividendsBuild a portfolio with sustainable dividend yields ranging from 8% to 12%SummaryThis is a series of articles discussing retirement portfolios using BDCs currently around 12% and their safer notes - baby bonds/preferred shares with yield-to-maturities ranging from 6% to 10%.
This article discusses PNNTG which is trading 55% below book value/NAV driving a current yield of 13.6% that is easily covered by income.
For higher yield investors this is a much better BDC investment with similar yields.
Also mentioned is its Baby Bond "PNNTG" currently considered a Buy trading at an 8% discount to par with a 7.7% yield-to-maturity over the next four years.
Introduction
This article is part of a series discussing how to build a retirement portfolio using Business Development Companies ("BDCs") currently yielding almost 12% and their safer notes - baby bonds/preferred shares with yield-to-maturities ranging from 6.5% to 10.0%. Please see the end of the article for a list of BDCs that I will be covering over the next two weeks.

Business Development Companies were created by Congress in 1980 to give investors an opportunity to invest in private small- and mid-sized U.S. companies typically overlooked by banks. The following slide from Ares Capital (Nasdaq: ARCC) breaks out many of the requirements of the BDC/RIC structure including 70% of assets in U.S. private companies diversified by size and sector.


This article discusses PennantPark Investment (PNNT) currently yielding 13.6% and its Baby Bond that trades under the symbol "PNNTG" with yield-to-maturity between 7% and... Read more