PNNT - PennantPark Floating Rate Capital: A More Reliable Alternative To PNNT

2024-04-29 02:57:19 ET

Summary

• PennantPark Floating Rate Capital provides an opportunity to collect a consistently high yield in this higher interest rate environment.
• Despite the fluctuation of interest rates over the last decade, the price of PFLT has remained in a consistent range and the distribution has never been cut.
• Although the price trades at a tiny premium to NAV, I believe entry here is ideal, as the price has consistently traded between $10-14 per share.
• The current dividend yield is 10.7% and distributions are paid out on a monthly basis, which makes this an ideal choice for income investors nearing or at retirement.

Overview

In an environment of higher interest rates, I believe that Business Development Companies are the right place to be! BDCs are a great way to offset the higher rates with a higher level of dividend income, since they direct profit from debt investments. Higher rates translate to higher interest you can collect from debt. PennantPark Floating Rate Capital ( PFLT ) is one of the ways to capitalize on this interest rate environment due to their structure, strategy, and holdings....

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