![]() Oaktree is best known for its work in distressed debt and high yield markets, so it knows a thing or two about evaluating loans and measuring credit risk. Oaktree Specialty Lending is managed by an affiliate of Oaktree Capital Management, a credit manager with over $253 billion in assets. Oaktree shares are yielding 8.12% right now, and almost 90% of the portfolio loans have floating rate provisions. (NASDAQ: OCSL) is another BDC that can offer investors the combination of an above-average yield and protection from rising interest rates. You can buy high yields, interest rate protection, expert credit managers, and a measure of international diversification at a discount to the value of the current portfolio. The managers of the BDC can draw on the lending expertise of Bain Capital Credit, which manages $48.4 billion in assets in credit-related products.īain Capital Specialty is also joining up with another alternative asset manager, Pantheon Group, to expand into the direct lending markets in Australia and Europe.īain Capital Specialty Finance shares are currently selling at a 4% discount from the net asset value of the loans in the portfolio. This BDC is affiliated with Bain Capital, a leading global alternative asset manager with over $130 billion in assets under management. At the current rate, Bain Capital Specialty shares are yielding 8.97%. Over 97% of the loans made by Bain Capital Specialty are floating rate. (NYSE: BCSF) is an excellent example of a BDC that offers a nice combination of yield and rate protection. Here are our top dividend stocks right now… This High Dividend Stock Pays 8.9%īain Capital Specialty Finance Inc. That will protect us from interest rate risk. Since business development companies pass through the interest payments, we should see our dividends go up as well. If interest rates go up, businesses that are borrowers of a BDC will see the rate on their loan go up. Most BDCs lend in the middle market of corporate America, where most companies have not yet gone public. You may recall that BDCs are investment funds that lend money to companies from expansions, financing merger and acquisitions transactions, and other corporate uses. We're looking at a specific group of dividend-payers called business development companies (BDCs). High dividend stocks are simply the best way to add income to your portfolio in this low interest rate, growing inflation environment.Īnd we'll do even better than give you high-yield dividend stocks. That's why we're going to walk you through it and show you some of the best dividend stocks to buy now. It is a whole new ball game for income investors, and most have never played this version of the game. We haven't seen inflation rates of 4% since 1990. The possibility of losing principal due to interest rate risk is something no income investor has dealt with in over 20 years. The last time we saw a significant move higher in rates was back in 1998, when rates moved from 4.6% on the 10-year to almost 7% in early 2000. Income investors will have to deal with something they have not faced in well over a decade. The combination of low starting rates and the real possibility of inflation and higher rates on the horizon is a new problem. ![]() That's more than triple the rate you'll get from even the best government bonds. On the other hand, the high dividend stocks we're going to show you yield over 7%. The sparkling 2.2% on the 30-year bond does not do much for those needed to earn a decent rate of their retirement cash. While the move from 0.50% to the current 1.58% yield roiled markets, it's not going to put much more cash in the pockets of income investors. While we hear talk on a daily basis about inflation and higher interest rates, we have seen only a slight move up on the rates on 10-year treasury bonds. Despite all the talk about rising interest rates, owning high dividend stocks is still the best way to add income to your portfolio for the foreseeable future.
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