These BDCs Yield Up to 15.6%. But Can We Trust Them?

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These BDCs Yield Up to 15.6%. But Can We Trust Them?

This high-yield sector is being taken to the woodshed by the Wall Street spreadsheet jockeys this year.

The contrarian opportunity? Big yields up to 15.6% in BDC Land. Some of these deals are trading for as little as 72 cents on the dollar.

Which means opportunists like us have been handed something rare: wild yields of 11% to 15.6% for as little as 72 cents on the dollar.

Business development companies (BDCs) are “Main Street bankers” because they do what Wall Street won’t: provide capital to small and midsized businesses that the big banks either ignore entirely, or won’t touch without demanding a firstborn as collateral.… Read more

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Five Dividends Up to 15% the “Smart Money” Can’t Stand

I hadn’t seen my boy in years. He wasted no time laying into my career decisions.

“Why are you messing around with the finance stuff? The blogging? No future in it.”

Well, good to see you too, buddy.

“You have real value in the software thing you’re doing. Stick with that.”

His advice was to leave Wall Street to him. He worked for a big-name firm. At the time of our run in, we were five or so years out of undergrad.

In true contrarian form, I ignored him. And it’s a good thing! Here we are talking stocks together and the software startup he wanted me to focus 100% on?… Read more

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Life-Changing Dividends: 7 BDCs Paying Up to 19.6%

The manic market has been dumping business development companies (BDCs) left and right. Let’s talk about a seven-stock BDC portfolio (yielding 13.5%!) that is poised to bounce back when sanity returns.

BDCs, which lend money to small businesses, are on the “outs” with the Wall Street suits after countless soft jobs reports. The spreadsheet jockeys fret about an unemployment-induced economic slowdown and miss the real story: small businesses are making more money than ever thanks to AI.

Here is what’s actually happening in the Main Street economy:

  • Employers—especially nimble small business owners—are implementing AI to streamline and even run their operations.

… Read more

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2 Big Dividends (Up to 17%) That Are Way Too Good to Be True

Business development companies (BDCs) have gained popularity in recent years, but they still don’t get as much attention as they should. Which is too bad, because they pay life-changing (no exaggeration here) dividends.

The two we’ll look at below yield more than 12.9%. In other words, drop $10,000 in and you’re getting $1,290+ back in dividends every year.

That makes BDCs useful tools for retirees. They’re also a “best friend” to what I’ll call “middle market” companies—those that are too big to borrow from a local bank but too small to interest big, institutional players like, say, a Goldman Sachs (GS).… Read more

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Playing With Fire? Four Huge Dividends up to 16.5% the Pros Say We Should Avoid

Wall Street analysts have “Buy” ratings on 388 stocks in the S&P 500. That’s over 76% of the index!

Thank you, suits, for the curation. No, seriously. We contrarians are going to comb through the Holds and, even, the lone Sell:

Analysts Rate Most Stocks as “Buys”

Source: S&P Global Market Intelligence

Analyst optimism is the norm. Analysts need access, companies provide them with access. One hand washes the other, thus it is rare to see unfavorable ratings on stocks.

The problem with a Buy rating is that there is nobody left to upgrade the stock. Every delta is a downgrade.… Read more

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They’re Small. They’re Cheap. And They Yield Up to 14.7%.

The index huggers are, rightfully, fretting about the only position they own, the S&P 500, which is heavy on Nvidia (NVDA). The soon-to-be-fallen angel is the third largest component of the index at 6.3%.

“America’s ticker” SPDR S&P 500 ETF (SPY) yields only 1.2% and trades for 22-times earnings. The S&P SmallCap 600, meanwhile, which nobody owns, trades for a more reasonable P/E of 16.

And select small caps even pay serious dividends. I’m talking about yields between 9.1% and 14.7%.

But are these value stocks? Or are they merely cheap for a reason? Let’s explore a group of five small caps paying big dividends.… Read more

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The Pros Say “No” to These Dividends Up To 13%. I Say …

The haters are out in full force.

Wall Street “pros” are downright disgusted with high-yield stocks. Here at Contrarian Outlook, this pessimism warms our heart. With no analysts left to slap a Sell rating on these names, the future is filled with upgrades.

By the way: Consensus Buy calls are a dime a dozen. Analysts notoriously lean, ahem, optimistic, so there’s nothing special about a stock that’s dripping in positive ratings. But if a stock is stuffed with Sells, that’s rare, and I take notice.

How unusual are Sell calls? Just one S&P 500 stock is rated a consensus Sell right now.… Read more

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Invest Like VCs and Earn 13.5% Yields … On Average!

Buying a business development company (BDCs) is kinda, sorta like investing like a venture capitalist (VC).

Minus the arrogance. And the lack of yields!

I was 26 when I realized that VCs were just regular guys and gals. Well, let’s be honest—mostly guys. They didn’t necessarily know anything special. But VCs play the part, sitting in their Steelcase chairs and short sleeved polo shirts while it’s 60 degrees out here in Northern California.

BDCs, on the other hand, are investments for the people. Plus, they pay—up to 15% in dividends!

Here’s a quick primer. BDCs lend to small and midsized businesses that the big banks either won’t touch.… Read more

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Big Yields, Little Stocks: 5 Small-Caps Paying up to 14.7%

Small dividend stocks are dirt cheap right now. I’m talking about stocks trading for less than one year’s worth of sales. Yields up to 14.7%. And single-digit P/E ratios.

Why such deals? Well, because they’ve been pummeled into bargain territory of late. A number of high-yield bargains are staring us right in the face.

Small firms, straight up, are the cheapest stocks on the planet right now:

Value is great but show us the money! We’ll do so with five small-caps averaging a stellar 12% in yield among them. Are these deals or are these equities cheap for a reason?… Read more

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Analysts Say to Sell These 6.3%-12.6% Dividends, But…

Vanilla investors buy stocks that Wall Street approves of.

Why?

If a stock is showered with Buy ratings, then who is left to bid the price even higher? Nobody!

This lame “strategy” feels good but ends up with latecomers top ticking the market. Which is why we contrarians aim differently—for the bottom of the barrel.

Give us stocks with Sell ratings. Which often means there’s nobody left to sell!

Today we’ll discuss a pack of discarded dividend stocks paying up to 12.6%. Not only are these yields real, and spectacular, they have price upside potential to boot.

After all, a stock slathered with Sell labels has nothing but upgrades in its future.… Read more

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