- When the pandemic hit last year, this higher-yield sector took a huge pricing hit with dividend yields soaring to 30% to 40%.
- I was actively making purchases during this volatility as I have identified the Business Development Companies ("BDCs") that will outperform during an economic downturn.
- Clearly, the market was expecting dividend cuts that never came for most higher-quality BDCs, and some have recently been increasing regular distributions and/or paying supplemental dividends.
- BDCs are still yielding 10%, including CSWC discussed in this article, but these yields will likely come down as investors realize the strength and resilience of this sector to outperform during economic challenges.
For further details see:
Growing Dividends During A Pandemic: Capital Southwest