Monthly Dividend Stock Analysis Series – Part 3
Here we are with part 3 of our analysis series looking at stocks that pay monthly dividends. In this edition, we are looking at a popular business development company (BDC); Main Street Capital (NYSE: MAIN)
Monthly Dividend Stock Number 3: Main Street Capital
Business Development Companies (BDCs) are often a good bet if you are looking for a stock that pays dividends on a monthly schedule, and Main Street Capital has been a favorite of income investors for a while.
The company provide debt financing and equity capital to mid-size corporations with an annual turnover between $10 million to $150 million. MAIN’s investments generally provide recapitalization finance, support management buyouts, finance growth and fund new acquisitions.
The company had a portfolio of 181 investments in companies at the end of Q1, 2020. These include a number of equity investments in mid-market companies, and loans. MAINs market capitalization is around $2 billion, and the company generated around $157 million in investment income in 2019.
Weathering the Storm in 2020
Recently, the company has faced some headwinds from low interest rates and the coronavirus crisis. According to the last quarterly report (Q1, 2020), MAIN’s distributable net investment income fell by 10 per cent (10%) compared to Q1, 2019. Net asset value per share also fell by $3.18 to $20.73 in the first 3 months of 2020.
MAIN has been a strong performer for stockholders since 2010, growing it’s net investment income at a compound rate of 8.9 per cent (8.9%). Today, they are still paying monthly dividends at $0.205 per share, giving this stock an attractive yield of 7.9 per cent (7.9%).
Analysts are quietly confident in their forecasts for MAIN, predicting future growth in distributable net investment income of about 2 per cent (2%) per year, and overall annualized returns of between 7 and 8 per cent (7% – 8%).
For more useful articles like this, visit Garnaco’s blog. You can access all the Monthly Dividends Stock Analysis Series articles at the links below:
- Monthly Dividend Stock Series 1 : Realty Income
- Monthly Dividend Stock Series 2: STAG Industrial
- Monthly Dividend Stock Series 3: Main Street Capital
- Monthly Dividend Stock Series 5: Shaw Communications
- All 53 Stocks That Pay Monthly Dividends
Be first in line to hear about exclusive off-market investments? Join 5,000+ self-directed investors on the VIP Priority Investor List and get details of exclusive offers in your inbox every Friday