The 2 Safest BDC Dividends Right Now
Business development companies, or BDCs, were created in the 1980s by Congress as an investment vehicle that invests in a portfolio of small- and mid-sized companies, mostly private, as a way to spur job growth and help emerging companies grow.
As regulated investment companies, they don't pay corporate taxes on profits, but they are required by law, much like real estate investment trusts (REITs), to pay out at least 90% of their net income in dividends. Because of that requirement, their yields are usually higher than your typical stock, often over 5%. BDCs are popular investments among people looking for passive income, but in this bear market, BDCs are even more popular as investors seek high-yielding dividends to offset big losses in their portfolios.
There are roughly 50 BDC stocks that trade on the market, but because they all invest in different companies and sectors, they are all quite different. Also, because they invest in small, mid-sized, and distressed companies, they can be risky. But here are two that look to be good, safe options right now.
Source Fool.com