They’re Small, They’re Cheap … And They Yield Up to 19%

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They’re Small, They’re Cheap … And They Yield Up to 19%

Small companies are sneaky AI-friendly plays because they are implementing these tools faster than their larger competitors.

Expect to see these smaller firms become more efficient in the quarters ahead. Sales will continue to increase while headcounts will remain relatively flat as robots take up the slack—a boon to future profits.

Ironically, small caps are currently the cheapest sector on the board:

Broad-Market Forward P/Es:

  • S&P 500: 22.2
  • S&P MidCap 400: 16.2
  • S&P SmallCap 600: 15.6

So, we turn our attention to a six pack of small but mighty dividend payers. Let’s start with a lender that yields “only” 15.7% per year and work our way up from there.… Read more

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Trump 2.0 is Bullish for BDCs: 7 Yielding Up to 14%

Trump 2.0 will feature Wall Street-approved suit Scott Bessent as Treasury secretary. Bessent will advocate for financial deregulation and increased lending. Easier and faster money. Which will be a boon for private equity (PE) firms and business development companies (BDCs).

Today we’ll discuss seven BDCs yielding between 11.1% and 14.2%. They operate like PE shops—both will benefit from a friendly deal-making environment.

For our income investing purposes, we pick BDCs because it is easier to buy them.

We can buy BDCs individually as we would any stock. And BDCs can avoid taxes at the federal level by paying out at least 90% of their taxable earnings to shareholders in the form of dividends.… Read more

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Rising Rate Dividend Plays Paying Up to 9.8%

On Sunday night, our old friend exclaimed to my wife and me: “How have you all been??”

It’d been, well, almost a year since we’d been to her bar. We had plenty to catch up on with our drink-slinging pal as we sipped and snacked. Back on the home front, our babysitter had recently resurfaced and appeared to have bedtime under control. It was nice to have a throwback evening, the type we all took for granted just 12 months ago.

In the interim, many income investors have, likewise, taken low long-term rates for granted. Not we contrarians, of course.… Read more

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