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But what's most important to investors is that dividend stocks have crushed non-payers in the return column over the last half-century. BDCs are a type of business that invests in the equity (common and preferred stock) and/or debt of middle-market companies. billion in debt securities. Through Sept.
There are many types of businesses that could benefit from reductions in interest rates. In particular, I've been looking closely at businessdevelopmentcompanies ( BDCs ). What are businessdevelopmentcompanies? HTGC Total Return Level data by YCharts. BDCs are pretty interesting.
Ares Capital Ares Capital is the world's largest publicly traded businessdevelopmentcompany ( BDC ). As a result, heaps of well-run midsize businesses are starving for capital and willing to pay eye-popping interest rates. In the second quarter, the average yield on debt securities in Ares Capital's portfolio was 12.2%
In particular, "The Power of Dividends: Past, Present, and Future" compared the performance of dividend-paying companies to non-payers over a 50-year period (1973-2023). The report found that dividend stocks more than doubled the average annual return of non-payers (9.17% vs. 4.27%). For instance, the company depends on a strong U.S.
As a businessdevelopmentcompany (BDC) , Ares must return at least 90% of its income to shareholders in the form of dividends for its profits to be exempt from taxes. The company has a lot of income to return with its dividend yield topping 9.2%. The company should be able to keep increasing FCF.
Although other asset classes have delivered positive nominal returns, including bonds, housing, and various commodities, such as gold, none have come close to matching the annualized total return of stocks, including dividends, over the last century. billion debt-securities portfolio had a weighted-average yield of 12.1%.
The rise of artificial intelligence (AI), the return of stock-split euphoria, and better-than-expected corporate earnings/economic data helped propel all three major stock indexes to multiple record-closing highs. billion in first-lien secured debt makes it a primarily debt-focused BDC. For example, the company's $1.66
With thousands of publicly traded companies and exchange-traded funds (ETFs) to choose from, there is no one-size-fits-all strategy that you'll have to stick to. But among these seemingly countless ways to grow your wealth on Wall Street, few can hold a candle to the long-term returns delivered by dividend stocks. For instance, 99.9%
Morgan Asset Management, a division of money-center bank JPMorgan Chase , released a study that compared the performance of publicly traded companies that initiated and grew their payouts between 1972 and 2012 to public companies that didn't offer a payout over the same timeline. annualized return for the non-payers.
Although other asset classes have delivered nominal gains for investors, including housing, gold, and Treasury bonds, no other asset class comes remotely close to the average annual rate of return that stocks have generated over the last 100 years. These are typically unproven small and microcap businesses. Image source: Getty Images.
Buying shares of businesses that produce profits and commit to returning those profits to their shareholders is an investing strategy with a terrific track record. average annual return, according to Hartford Funds and Ned Davis Research. By the first half of 2025, the company expects net debt to fall to just 2.5x
According to the report's findings, dividend-paying companies delivered an average annual return of 9.17% over a half-century (1973-2023), while being 6% less volatile than the benchmark S&P 500. PennantPark has been paying a monthly dividend since July 2011, which is mere months after it debuted as a public company.
In particular, one table compared the average annual return of income stocks to non-payers over the last 50 years (1973-2023), while also taking into account the average volatility of each group. Meanwhile, non-payers were 18% more volatile than the benchmark index and produced a subdued annualized return of just 4.27% over 50 years.
A report issued by JPMorgan Chase 's wealth management division in 2013 found that publicly traded companies initiating and growing their payouts between 1972 and 2012 delivered an annualized return of 9.5%. annualized return for the public companies that didn't offer a dividend over the same 40-year stretch. All but $0.1
Although there are countless strategies that can, over time, make investors richer, few strategies have been more successful from a return standpoint than buying and holding dividend stocks. Since March 31, 2022, AT&T's net debt has declined from $169 billion to $128.9 million in net debt, its net-leverage ratio is a modest 0.31.
One of the best ways to create wealth is by investing in companies that pay a dividend. While many different types of companies pay dividends, businessdevelopmentcompanies (BDCs) represent a unique opportunity. The company specializes in an instrument called venture debt -- or loans made at high interest rates.
Luckily, one of the most effective methods to generate outsize returns, buying dividend stocks to hold long term, is also one of the easiest to implement. Businesses usually become profitable on a recurring basis long before they commit to a dividend program. AT&T finished September with $129 billion in net debt.
During a 50-year period that ended in 2023, non-dividend-paying stocks in the benchmark S&P 500 index delivered a 4.27% average annual return. Ares Capital Corporation Ares Capital is a businessdevelopmentcompany, or BDC. Ares Capital finished June with 525 portfolio companies, which was 10.5% a year earlier.
Before you plow every penny you can find into these two stocks, it's important to remember that an especially high yield means the market is worried the underlying business can't continue meeting and raising its dividend commitment. The average yield Ares received from its portfolio of debt securities was a healthy 12.2%
Investors are more than a little concerned with a debt load of about $143 billion. With customers who rarely disconnect their mobile or fiber internet connections, AT&T's telecom business is a reliably profitable one that generated $18 billion in free cash flow over the past 12 months. at the end of June from just 7.7%
Morgan Asset Management, a division of money-center bank JPMorgan Chase , released a report that compared the performance of publicly traded companies that didn't pay a dividend to those that initiated and grew their payouts between 1972 and 2012. annualized return for the dividend-paying companies and a paltry 1.6%
In a collaboration with Ned Davis Research, Hartford Funds noted that companies paying dividends delivered an average annual return of 9.18% over a 50-year period (1973-2022). Meanwhile, the non-payers generated a far more modest annual average return of 3.95% over a half century. billion in secured debt. Since Sept.
According to a study from Ned Davis Research and Hartford Funds, publicly traded companies that initiated and grew their payouts between 1973 and 2022 generated an annualized return of 10.24%. Legacy telecom companies are lugging around quite a bit of debt on their balance sheets. Image source: Getty Images.
Furthermore, dividend stocks have a rich history of outperforming companies that don't offer a payout. annualized return between 1972 and 2012, according to a 2013 report from the wealth management division of JPMorgan Chase , public companies that initiated and grew their payouts produced an annualized return of 9.5%
A 2013 report from the wealth-management division of JPMorgan Chase found that companies initiating and growing their dividends generated an annualized return of 9.5% By comparison, publicly traded companies with no payout crawled to a meager 1.6% annualized return over this same four-decade span. between 1972 and 2012.
In collaboration with Ned Davis Research, Hartford Funds found that dividend payers averaged an annual return of 9.18% over a half-century (1973-2022). By comparison, companies that didn't offer a payout to their shareholders produced an average annual return of just 3.95%. The company raised its monthly payout twice last year.
While many different types of companies pay dividends, one of the more generous types is businessdevelopmentcompanies (BDCs). Hercules Technology Growth Capital (NYSE: HTGC) is a leading BDC that specializes in a vehicle called venture debt for life sciences, energy, and technology businesses.
Ares Capital Ares Capital (NASDAQ: ARCC) is America's largest publicly traded businessdevelopmentcompany ( BDC ). Middle-market businesses generally have over $10 million in annual revenue, but they still can't get America's big banks to give them loans. as of Sept. dividend yield at recent prices.
Morgan Asset Management, released a report that compared the returns of publicly traded companies initiating a dividend and growing their payout over a period of 40 years (1972 to 2012) to publicly traded companies that didn't offer a dividend over the same time line. annualized return over four decades. All but $0.1
A recent study from Ned Davis Research and the Hartford Funds examined the performance of dividend-paying companies to non-payers over a roughly half-century stretch (1973-2022). What this analysis showed was that dividend payers generated an annualized return of 9.18% over five decades. million in debt from middle-market businesses.
Stag Industrial specializes in buying commercial industrial properties from businesses, which are often leased back to those very same businesses. This is enticing to clients because they aren't limited in how they can use capital proceeds to benefit their business, whether for debt reduction or further growth.
Hercules Capital Hercules Capital is a businessdevelopmentcompany ( BDC ) that lets everyday investors get in on the ground floor with innovative tech and life science businesses. Its investments include a mixed bag of successful companies, including Axsome Therapeutics , Palantir Technologies , and Transmedics Group.
You make a smart investment in an outstanding business, and it rewards you with bountiful cash returns year after year. Here are two high-quality companies that could pay you lucrative cash dividends for the rest of your life. As the largest publicly traded businessdevelopmentcompany ( BDC ) in the U.S.,
As a result, companies that record between $10 million and $1 billion in annual revenue are generally starved for capital and willing to pay businessdevelopmentcompanies ( BDC ) like PennantPark Floating Rate Capital (NYSE: PFLT) above-average interest rates. The company generated $8.5
There was $129 billion in net debt on AT&T's balance sheet at the end of September, which isn't as frightening as it might seem. The company expects to achieve a manageable net debt-to-adjusted earnings before interest, taxes, depreciation, and amortization ( EBITDA) ratio of 2.5 million in net unsecured debt.
Despite dozens of stock market corrections and bear markets, the average annual return of stocks crushes the annualized long-term returns of Treasury bonds, gold, oil, and housing. Dividend payers averaged a 9.18% annual return over 50 years, while non-payers delivered a more modest 3.95% average annual return.
Though a 15% yield is typically viewed as unsustainable for most companies, Annaly has supported an average yield of around 10% over the past two decades and returned $25 billion to shareholders since its initial public offering in 1997. million in debt securities. million debt-security portfolio is in first-lien secured debt.
Ares Capital Corporation: Ultra-high yield and mild growth Ares Capital Corporation (NASDAQ: ARCC) is a businessdevelopmentcompany ( BDC ), which means it can avoid paying income taxes by delivering at least 90% of its earnings to investors as a dividend. At recent prices, Ares Capital offers a huge 10.1%
Companies in the benchmark S&P 500 index that initiated a dividend or grew their payout over the 50-year period from 1973 through 2022 delivered a 10.24% average annual return. This businessdevelopmentcompany (BDC) makes monthly payments, and it offers an eye-popping 11.3% Image source: Getty Images.
If you don't have enough capital to spread among dozens of qualified candidates, or a team of experienced analysts who can help you recognize potential winners, you would be more likely to lose your shirt by putting your money into such businesses than to realize significant gains over the long run.
During the 50-year period between 1973 and 2023, dividend-paying stocks in the benchmark S&P 500 index generated a 9.17% average annual return. The average annual return produced by non-dividend payers in the same index was just 4.27% over the same time frame, according to Ned Davis Research and Hartford Funds.
Now that some of that risk has been alleviated , the company has a pretty good chance to continue meeting its dividend obligation. Ares Capital: a 10.34% yield Ares Capital (NASDAQ: ARCC) is a businessdevelopmentcompany, or BDC. The company reported a net interest margin that rose 17% year over year to 7.5%
Ares Capital: A 10.05% yield Ares Capital (NASDAQ: ARCC) is a businessdevelopmentcompany, or BDC. Ares Capital is essentially a lender to midsized companies that have a hard time getting the big banks to return their calls. a year earlier. This BDC's costs of capital are rising too, but not quite as fast.
The company has raised its dividend payout for 17 straight years. Soaring interest rates have the market worried that Verizon's debt load could become too much of a burden. Steady cash flow generation and declining capital expenditures suggest its debt load will be manageable. Shares of Verizon offer a huge 7.7%
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