A High-Yield Stock to Think About
Main Street Capital Corporation (NYSE:MAIN) may not sound
like a familiar name to most people, but there are two obvious reasons why it
stands out compared to other stocks in today’s market.
The first reason is its yield.
Interest rates and market dividend yields are currently near
the low end of their historical averages. The 10-year U.S. Treasury note yields
just 0.95% at the time of this writing. Meanwhile, the average dividend yield
of companies in the S&P 500 is a measly 1.6%. (Source: “S&P 500
Dividend Yield,” multipl.com, last accessed December 8, 2020.)
Main Street Capital Corporation, on the other hand,
currently offers an annual dividend yield of 7.7%.
The second reason is the company’s payout frequency.
You see, among the stocks that have a regular dividend
policy (plenty of companies don’t pay any dividend at all), the vast majority
of them have a quarterly distribution schedule, meaning shareholders have to
wait three months between dividend payments.
The wait time for MAIN stock investors, though, is much
shorter; Main Street Capital is a monthly dividend stock.
So, what we have here is a high-yield stock that pays
investors on a monthly basis, which, given the current economic environment,
may prompt the question of whether the payout is too good to be true.
To answer that question, let’s take a look at what the
company does.
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