20 BDCs And 13 Of Them Are Likely To Slash Their Dividends This Year

Roberts Berzins, CFA14.5K FollowersFollow5ShareSavePlay(11min)CommentsSummaryCurrently, BDCs provide very high-yield opportunities.The fact that additional interest rate cuts are unlikely to happen this year should theoretically support the existing levels.Yet for most BDCs, the damage has already been done.In the article I walk you through 20 BDCs that have their base dividend coverage levels at 110% or below and explain why 13 of them are likely to slash their dividends this year. DNY59/iStock via Getty Images Introduction The most common reason why investors deploy capital in BDCs (BIZD) is to capture double-digit income. Price appreciation is secondary, which is only logical given that at the end of the day we are talkingThis article was written byRoberts Berzins, CFA14.5K FollowersFollowRoberts Berzins has over a decade of experience in the financial management helping top-tier corporates shape their financial strategies and execute large-scale financings. He has also made significant efforts to institutionalize REIT framework in Latvia to boost the liquidity of pan-Baltic capital markets. Other policy-level work includes the development of national SOE financing guidelines and framework for channeling private capital into affordable housing stock. Roberts is a CFA Charterholder, ESG investing certificate holder, has had an internship in Chicago board of trade (albeit, being resident and living in Latvia), and is actively involved in "thought-leadership" activities to support the development of pan-Baltic capital markets.Analyst’s Disclosure: I/we have a beneficial long position in the shares of KBDC either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.