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Investment Trust Dividends

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DIVIDENDS

Berkshire Hathaway owns approximately 400 million shares of Coca-Cola. With Coca-Cola paying an annual dividend of $2.04 per share, that stake generates roughly:

400,000,000 shares × $2.04 = $816 million per year

That breaks down to about $204 million every quarter flowing from Coca-Cola to Berkshire.

For a single stock position, that level of income is extraordinary. Coca-Cola has effectively become a steady cash-producing asset inside Berkshire’s portfolio, sending more than three-quarters of a billion dollars annually to the conglomerate without requiring Buffett to sell a single share.

CONTARIAN INVESTOR

These Overlooked Monthly Income Machines Yield Up to 9.9% – And We Can Buy Them on Sale

Brett Owens, Chief Investment Strategist
Updated: May 1, 2026

Preferred stocks are a little-known dividend secret. Worth knowing, by the way—they can yield up to 9.9%!

These “forgotten cousins” of common stocks can make a dividend portfolio. Plus, the discounts! Today we can buy a basket with some ingredients fetching as little as 89 cents on the dollar.

A quick refresher on preferreds. When a company needs capital, it typically either sells common stock—the AAPL to our Apple, the JPM to our JPMorgan—or bonds. But there is a third option, and plenty of companies use it: preferred stock.

Like common stock, preferreds give you a sliver of ownership in a company, they can improve in price based on the company’s performance, and they pay dividends. Unlike common stock, preferreds typically don’t enjoy voting rights, the dividend is usually fixed, and it trades around a par value. In fact, these are all bond-like traits, which is why preferreds are often referred to as “hybrids.”

But what really makes preferreds stand out is just how big those dividends are. A company’s preferreds will routinely pay in the mid- to high single digits, which will typically be 2x to 3x what they’re paying on their common shares.

Just look at what a basic preferred exchange-traded fund (ETF) pays compared to the broader market.

Funds in general are a great way to own preferreds for numerous reasons, not the least of which is that they often pay us monthly. But plain-vanilla ETFs have their limitations. They gobble up preferreds with almost no regard to quality or value, which is why we can often do better with human managers at the helm.

We could get that actively managed coverage through mutual funds, but closed-end funds (CEFs) are the superior play. Here’s why:

  • CEFs’ prices frequently disconnect with the value of their assets, sometimes allowing us to buy a fund for much less than it’s actually worth.
  • CEFs can take on debt to plow additional assets into their highest-conviction picks, which can supercharge performance and the yields they pay.
  • CEFs can use options strategies such as selling covered calls to generate even more income than the portfolio would produce on its own.

The result? Yields that blow ETFs and mutual funds out of the water—and translate into a massive yearly salary of $43,000 if we put a $500,000 nest egg into the trio of CEFs I’m about to highlight.

And unlike preferred ETFs, we can buy these 7.6%- to 9.9%- yielding closed-end funds for discounts of between 4% and 11%.

John Hancock Premium Dividend Fund (PDT)
Distribution Rate: 7.6%

A great example of the difference the CEF structure makes is the John Hancock Premium Dividend Fund (PDT). Its 7%-plus yield would make it one of the top payers in ETF land, but it’s actually one of the lowest-yielding preferred closed-end funds … because management is playing with a little bit of a handicap.

PDT is a hybrid fund, investing roughly 50% of its assets in preferreds, and the other 50% in plain old common dividend stocks.

The preferred sleeve of the portfolio can hold its own. Its top holdings include preferreds from the likes of Citizens Financial (CFG)Wells Fargo (WFC), and Citigroup (C) that mostly pay in the 6%-7.5% range. The common sleeve? Sure, it includes Verizon (VZ) and a couple of other formidable dividend payers, but most of these companies are throwing off sub-4% distributions.

How does PDT bridge the funding gap? By throwing a lot of extra capital at management’s picks—the fund’s debt leverage currently stands at a thick 34%.

Over the very long term, this willingness to bet big has made itself apparent in two ways:

  1. Much more volatility than a basic portfolio of preferreds.
  2. Returns that not only blow vanilla preferred ETFs out of the water, but are also mighty competitive with even 100% dividend-equity funds.

This Hybrid Portfolio Has a Lot of Horsepower

Despite its run of late, John Hancock Premium Dividend Fund is trading at a wide 11% discount to its net asset value (NAV), meaning we’re effectively buying its preferreds for 89 cents on the dollar. That’s not just cheap on its face—it’s a relative bargain for this monthly payer, too. PDT has, on average, traded almost in line with its NAV over the past five years.

Cohen & Steers Tax-Advantaged Preferred Securities and Income Fund (PTA)
Distribution Rate: 8.3%

Most of us have been trained to see “tax-advantaged” and think “municipal bonds.”

As much as I’d like to give Uncle Sam the slip on my preferred payouts, that’s not quite what the Cohen & Steers Tax-Advantaged Preferred Securities and Income Fund (PTA) has to offer. Instead, PTA aims to minimize federal income tax consequences on its dividends by owning preferred stocks that pay qualified dividends—which are taxed at the more favorable long-term capital gains rates—and by adopting more of a buy-and-hold mentality so as not to trigger short-term capital gains. (And when it does pick up short-term capital gains, it’s mindful about offsetting those gains with short-term losses.)

Management isn’t exactly breaking its back to do this. Most preferred stocks pay qualified dividends. And preferreds aren’t exactly day trading fodder, either.

This is a global portfolio of about 300 preferreds, split roughly 50/50 between the U.S. and the rest of the world, mostly developed Europe. Financials, like BNP Paribas (BNPQY) and Royal Bank of Canada (RY), are dominant at almost 75% of assets, which is par for the preferred course. Credit quality is fine if not a little low; about 55% of assets are allocated to investment-grade preferred stocks. Leverage is even higher than PDT, at 35%, helping juice the payout above 8%.

PTA has only been around since 2020 and didn’t exactly charge out of the gate. But a lot of that had to do with timing—many preferred funds took it on the chin through the rate hikes of 2022 and 2023.

Since Its 2023 Bottom, PTA Has More Than Doubled Up the Preferred Standard

Cohen & Steers’ fund is trading at a 7% discount that looks decent in a bubble. However, its five-year average discount is only a hair lower, so it’s technically less expensive than normal, but it’s not a screaming deal.

We can’t get too attached, though. Like with some other CEFs, PTA is a “term” fund that’s scheduled to liquidate on Oct. 27, 2032, though the fund’s board of trustees technically could vote to extend its life by up to two years.

Nuveen Variable Rate Pref & Inc Fund (NPFD)
Distribution Rate: 9.9%

The Nuveen Variable Rate Preferred & Income Fund (NPFD), which came to life in 2021, has a similar story. It started trading not long before the Fed’s tightening pounded preferreds, so it looked awful from the start—but it has been in a relative sprint ever since bottoming out in 2023.

Preferred stocks usually pay a fixed dividend, but as this Nuveen fund’s name implies, NPFD is interested in variable-rate preferreds. Sort of.

Most of NPFD’s assets (about 85% right now) are invested in “fixed-to-fixed rate securities,” which step from one rate to another based on a set schedule, not underlying interest rates. Another 9% is dedicated to fixed-to-floating rate securities, which start with a fixed coupon that it pays for a few years before switching to a variable-rate coupon. It even holds a few fixed-rate securities. In all, only about 5% of assets are invested in truly variable-rate preferreds.

The rest of the portfolio details are pretty standard. This is another global preferred fund, at a roughly 60/40 U.S./international blend. About 75% of assets are in investment-grade preferred, so credit quality is good. And the 185-stock portfolio is amplified with 26% debt leverage.

Income investors would be hard-pressed to find a better preferred yield than what NPFD offers—at last check, it was the highest-yielding preferred fund on the market.

A discount to NAV of 4% is modest in the first place, but it’s actually more expensive than its long-term average discounts of almost 9%. So we’re not getting a screaming bargain here—but nearly 10% a month, paid monthly, papers over a lot of sins.

How to Secure Steady Monthly Dividends of Up to 14.9%

If your experience is anything like mine, you’ve been watching your monthly bills climb higher and higher for years—and fast.

Inflation is eating away at Americans’ financial security, which is why people closing in on their nest-egg targets for retirement are suddenly starting to get the jitters.

$1 million to comfortably retire? Yeah, maybe before COVID.

But here’s the thing: You very well may be able to clock out on a realistic amount of money—much less than a million, in fact.

You just can’t do it holding Dow Jones blue chips.

You need true dividend powerhouses—like the companies I prioritize in my “9% Monthly Payer Portfolio.”

It’s all in the name. These generous stocks and funds average a yield of more than 9% across the board, and some of them pay up to almost 15% a year. That’s enough to live on dividends alone without ever needing to break off a piece of your nest egg to generate cash.

So, retirement on less than a million dollars? Yes. Here’s the math:

  • $600,000 nest egg could earn $54,000—in many places in the U.S., that’s enough for a fully paid retirement without even factoring in Social Security!
  • And let’s say you have managed to stash away a cool million bucks? The 9% Monthly Payer Portfolio would pay you a downright lush $90,000 in dividend income every year.

And you’re not cashing these dividend checks annually. Not quarterly, either.

You’re cashing them every single month.

No dumping money into certain stocks because you’re getting underpaid every third month—just paydays as smooth as when you were collecting a paycheck!

Across the pond

3 Best Dividend Stocks With 6%+

Yields And Attractive Valuations

Apr 30, 2026

PINEEPRRMR

Steven Cress, Quant Team

SA Quant Strategist

Follow Seeking Alpha on Google for the latest stock news

Summary

  • In today’s income landscape, selectivity remains critical. High yields can signal risk, but stocks with strong fundamentals prove that higher yields can coexist with discounted valuations.
  • Higher oil prices can create downside pressure on even the best dividend stocks, as investors price in higher-for-longer interest rates.
  • However, the underlying cash flow strength, FFO growth, and balance sheet health in these Strong Buy stocks help mitigate risk.
  • For patient investors, periods of volatility and price weakness may offer attractive entry points, allowing the opportunity to lock in attractive yields ahead of a more normalized macro environment.
  • I am Steven Cress, Head of Quantitative Strategies at Seeking Alpha. I manage the quant ratings and factor grades on stocks and ETFs in Seeking Alpha Premium. I also lead Alpha Picks, which selects the two most attractive stocks to buy each month, and also determines when to sell them.
Businesswoman use laptop and calculator analyzing company growth, future business growth arrow graph, development to achieve goals, business outlook, financial data for long term investment.
Prae_Studio/iStock via Getty Images

Best Dividend Stocks: Yield + Quality = ‘Sweet Spot’

Investors looking for the best dividend stocks are often challenged to balance higher yield and higher risk. So, finding quality stocks within this space requires identifying a sweet spot where yields are high but risk is not elevated. Broadly speaking, yields much higher than 6% can signal risk around fundamental weakness or declining growth potential. However, certain sectors, such as real estate, can often support yields in the 9-10% range without sacrificing quality. This is where focusing on Strong Quant Buys with attractive Dividend Grades comes into play.

“Quantamental” Analysis Outperforms VIG Over Time

Quant Dividend Score Performance vs VIG
Seeking Alpha

During the last 12 years, Quant’s back-tested strategy has delivered very impressive returns, beating the Vanguard Dividend Appreciation ETF (VIG). Looking ahead, the dividend environment in 2026 remains dependent on Federal Reserve policy and geopolitical uncertainty, which has created volatility in both the fixed-income and high-yield spaces. However, with inflation potentially leveling off and interest rates expected to moderate by year-end, the backdrop for selectively owning high-quality, high-yielding dividend stocks remains attractive. While risk remains in the short term, buying opportunities exist for stocks with solid fundamentals.

How I Chose the Best Dividend Stocks With 6%+ Yields

To select the best dividend stocks to feature in this article, I used the Seeking Alpha Stock Screener and chose the pre-selected Top Quant Dividend Stocks and filtered for Quant Strong Buys. I then selected stocks with forward yields above 6%, high Valuation Factor Grades, and attractive Dividend Grades.

1. Alpine Income Property Trust, Inc. (PINE)

  • Yield: 6.29%
  • Market Capitalization: $338.82M
  • Quant Rating: Strong Buy
  • Quant Sector Ranking (as of 04/30/2026): 11 out of 171
  • Quant Industry Ranking (as of 04/30/2026): 1 out of 11
  • Sector: Real Estate
  • Industry: Diversified REITs
PINE Stock Factor Grades
Seeking Alpha

Beginning with a small but impressive dividend stock selling at an attractive valuation, Alpine Income Property Trust is a net lease REIT that owns single-tenant retail properties leased to high quality companies under long-term agreements. The company’s portfolio consists of solid retailers, such as Wal-Mart (WMT) and Home Depot (HD), supporting stable and predictable rental income. PINE’s dividend yield tops 6% and is backed by reliable occupancy rates and conservative payout ratios. Despite these strengths, the stock trades at an attractive valuation, which is where we begin the Quant analysis.

PINE Stock Valuation Metrics
Seeking Alpha

PINE’s ‘A-‘ Valuation Factor Grade and top industry rank are well supported by its forward P/FFO valuation of 9.02, which represents more than a 35% discount to the sector median. This signals that the market is pricing more risk for the stock likely due to its small-cap status. However, when we look at Alpine’s forward growth estimates, a different story unfolds, helping to support the company’s attractive Dividend Growth Grade.

PINE Stock Dividend Growth Grade
Seeking Alpha

For a REIT like Alpine Income, FFO (funds from operations) is a core earnings driver, so its 7.60% Forward FFO Growth, which is more than double the sector median, more than supports PINE’s valuation. Furthermore, this supports AFFO expansion and dividend increases, reinforcing the 6%-plus yield. When interest rates finally stabilize, net lease REITs like PINE could see further growth along with continued attractive yields. The combination of steady cash flows and discounted pricing highlights the appeal of larger, mid-cap REITs with similar attributes.

2. EPR Properties (EPR)

  • Yield: 6.60%
  • Market Capitalization: $4.31B
  • Quant Rating: Strong Buy
  • Quant Sector Ranking (as of 04/30/2026): 9 out of 171
  • Quant Industry Ranking (as of 04/30/2026): 2 out of 3
  • Sector: Real Estate
  • Industry: Other Specialized REITs
EPR Stock Factor Grades
Seeking Alpha

EPR Properties is a specialty REIT that invests in experiential real estate, such as movie theaters, amusement parks, and ski resorts. While this niche space was once associated with higher risk, a combination of a resilient consumer and EPR’s portfolio diversification and consistent rent collection has restored investor confidence. The company’s 6.6% dividend yield is supported by strong cash and tenant health. Meanwhile, its valuation and dividend growth potential remain attractive.

EPR Stock Valuation Metrics
Seeking Alpha

Starting with EPR’s 10.46 forward P/FFO, this valuation metric suggests a discount of about 25% to the sector median. With growth improving and strong (its ‘A-‘ Growth Factor Grade has jumped up from a ‘C’ in three months), EPR appears ready to support its attractive 6.6% yield. This helps explain the REIT’s sector-leading Dividend Growth metrics.

EPR Stock Dividend Growth Grade
Seeking Alpha

EPR’s forward FFO Growth of 4.66% is significantly ahead of sector peers, which weigh in at an average of 2.91, and its Dividend Growth Rate – CAGR – over the past five years is more than 10x the sector. With consumer spending remaining resilient through recent geopolitical concerns and the potential for normalization later in the year, EPR offers a unique blend of income and recovery driven upside. That combination leads to a smaller-cap real estate company that operates in a different space but with similarly compelling valuation and yield profiles.

3. The RMR Group (RMR)

  • Yield: 10.37%
  • Market Capitalization: $556.53M
  • Quant Rating: Strong Buy
  • Quant Sector Ranking (as of 04/30/2026): 5 out of 171
  • Quant Industry Ranking (as of 04/30/2026): 1 out of 3
  • Sector: Real Estate
  • Industry: Diversified Real Estate Activities
RMR Stock Factor Grades
Seeking Alpha

The RMR Group is not a REIT but an alternative asset management company specializing in real estate and operating companies. So, rather than owning and operating the real estate directly, it earns management fees tied to assets that are owned by REITs. This asset light model generates strong margins and supports its high dividend, offering investors exposure to real estate without the downsides of direct property ownership. RMR has demonstrated consistent fee collection and cash flow stability. This status leads to dividend safety and is complemented by an attractive valuation.

RMR Stock Valuation Metrics
Seeking Alpha

RMR’s forward P/E of 23.62 offers more than a 23% discount to the sector median, and its 4-Year Average Dividend Yield of 10.14% provides historical evidence of its ability to maintain its high dividend. While its ‘C-‘ Dividend Growth Score indicates average growth compared to sector peers, the real estate company’s yield is already high, and its Dividend Safety Score is also attractive.

RMR Stock Dividend Safety Grade
Seeking Alpha

According to our back-testing, companies with a Dividend Safety Score of at least ‘A-‘ or better have averted a dividend cut 99% of the time. RMR receives a solid ‘A’ grade for dividend safety, which is supported by an FFO Interest Coverage Ratio of 6.36, which is more than double the sector median. This suggests RMR can easily meet its debt obligations, which is a strong signal that its dividend is reinforced by healthy underlying cash flows. For income investors, this presents an opportunity to capture both yield and valuation upside. Taken together, these ideas highlight a broader theme of buying opportunities across the real estate sector.

Conclusion: High Yields and Quality in Best Dividend Stocks

In today’s income landscape, selectivity remains critical. High yields can signal risk, but stocks with strong fundamentals like PINE, EPR, and RMR demonstrate that higher yields can coexist with discounted valuations and attractive Quant Dividend Scores. A near-term risk worthy of consideration is that higher oil prices can create downside pressure on even the best dividend stocks as investors price in higher-for-longer interest rates. However, the underlying cash flow strength, FFO growth, and balance sheet health in these Strong Buy stocks help mitigate risk. For patient investors, periods of volatility and price weakness may offer attractive entry points, allowing the opportunity to lock in attractive yields ahead of a more normalized macro environment.

Choose your retirement story

How the UK State Pension measures up against other countries — and why it’s not enough

Mark Hartley weighs the UK State Pension against other nations, revealing why it’s important for Britons to explore additional options.

Posted by Mark Hartley

The Motley Fool.

Portrait Of Senior Couple Climbing Hill On Hike Through Countryside In Lake District UK Together
Image source: Getty Images

Currently, the UK State Pension is roughly £12,548 a year before tax. That’s a useful safety net, but can it fully fund retirement? Let’s see how it compares to other countries.

Where the UK stands globally

Each year, the Mercer CFA Institute Global Pension Index ranks systems on adequacy, sustainability and integrity.

In 2025, the UK came 12th with a score of 72.2 – solid, but not world‑beating — while The Netherlands takes the top position, thanks to generous benefits and strong regulation.

  • Netherlands (1st): 85.4
  • Singapore (4th): 80.8
  • Australia (7th): 77.6
  • United Kingdom (12th): 72.2
  • United States (30th): 61.1

Among the G7 countries, our State Pension is often considered the least generous. UK retirees get only about 22% of average earnings from the state, the lowest in the group.

The upside is that our system scores better on long‑term sustainability because it leans more heavily on workplace and private pensions rather than pushing most of the cost onto the state.

Still, to supplement a State Pension, many people build private savings by investing in the stock market. How does that work?

Retirement investment accounts

For British investors, two popular options are a Stocks and Shares ISA and the Self-Invested Personal Pension (SIPP). Both allow investments in shares, funds and other assets, but they serve slightly different purposes.

With an ISA, money can be withdrawn at any time, and any gains or dividends are tax-free. A SIPP, on the other hand, is designed specifically for retirement. Contributions receive tax relief, but funds are usually locked away until at least age 55 (rising to 57).

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

In short, ISAs are more flexible, while SIPPs offer upfront tax advantages.

So how can an investor aim for the best outcome?

Building a retirement portfolio

Whether in a SIPP or ISA, stock selection is critcal. A balanced portfolio should include some defensive and income stocks to help reduce volatility.

But steady growth stocks are key to building wealth. One example is Coca-Cola Europacific Partners (LSE: CCEP). As a major distributor of softdrinks across large parts of Europe and beyond, it enjoys steady demand and revenue.

The shares are up 91.8% in five years (equivalent to 13.9% annualised), and it has 39 years of uninterrupted dividend payments. The current yield’s only 2.8% but is well covered by earnings. 

Price-wise, it looks cheap, with a price-to-earnings growth (PEG) ratio of only 0.45. Profitability looks good too, with a return on equity (ROE) of 24.42%.

So to recap:

  • Steady earnings resulting in high profitability.
  • A fair-to-low price with growth potential.
  • Moderate income appeal.

Of course, no investment is risk-free. Consumer demand for soft drinks can fluctuate, and currency movements can affect international earnings. More recently, sugar and health regulations post additional risks.

But overall, consistent demand backed by years of solid performance is why it’s the type of stock worth considering for a retirement portfolio.

The bottom line

Building a decent retirement pot through an ISA or SIPP takes time, patience and regular contributions. Early on, growth matters most, so many people tilt towards quality companies with room to expand. Later, reliable dividends can help turn that pot into a steady income.

By spreading investments across sectors, blending defensive and growth shares, and making regular monthly contributions, the State Pension becomes a helpful safety net – rather than your only lifeline.

What’s your plan ?

Want to start buying shares? How good are you at these 3 things?

This trio of simple questions can help provide some food for thought to anyone who wonders whether they are ready to start buying shares.

Posted by Christopher Ruane

Published 3 May, 11:50 am BST

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services.

Fans of Warren Buffett taking his photo
Image source: The Motley Fool

Lots of people dream of investing in the stock market – but not all of them ever actually start buying shares.

Different investors get different results. For some people who end up not investing, the opportunity cost of the missed chance is enormous.

Should you buy Apple shares today?

Here are three skills I think it can be helpful for an investor to have before they make their first move in the stock market.

Setting goals and devising a strategy

How good are you at knowing what you are trying to achieve, implementing a plan to try to achieve it, and modifying what you do along the way based on what happens?

Investing can involve a steep learning curve and, over time, most investors evolve their style.

But I think it still helps, from the day one starts buying shares, to have some sort of plan about how to invest and what success looks like.

Spotting undervalued opportunities

Ultimately, investing tends to boil down to a number of key elements and an important one is being able to buy something for less than it turns out to be worth.

Ideally, that would be much less than it turns out to be worth.

Simple though that may sound, it can be devilishly difficult in practice. Knowing what a company’s real value is today can already be hard enough – but successful investing also requires someone to assess what it might be worth in future.

Learning how to identify great opportunities that have been undervalued by the market is a skill — and potentially a very lucrative one.

Assessing risks as they really are, not as we’d like them to be

One thing that unites many experienced investors and those that start buying shares for the first time is an inability to weigh risks properly.

When we buy shares, naturally that is because we think we see an opportunity. That can lead the mind to underplay some of the risks involved.

Truly great investors take risks seriously. They do not start buying shares in a company or industry without having weighed such risks thoroughly.

Always look down first.

History Rhymes

CTY

If you want to buy CTY, looking at their history gives you some guidance, if e.g. you want to buy at 5% plus you may never have a position.

During the covid crash, you could have bought around £2.80 and the yield would have been 6.5%.

Now 1.5% – currently 2.5%, if you intend to buy and hold forever it makes a big difference to your SNOWBALL. Of course it’s always easier with hindsight but if you bought the yield, you would have a position, even though the price might have fallen further.

MRCH

LWDB

If you want to trade a higher yielder but want to add some safety to your snowball, you could pair trade with a lower yielder to achieve a blended yield of 7%.

FSFL

Dividend Investing

You do not need to take big risks with your hard earned.

At the start of 2009 you decided to invest 5k in CTY because even back then they had a long history of increasing their dividends and to KISS, you decide to re-invest the dividends into the share, knowing that even if the price falls, you get more shares for your money and therefore a higher yield.

Your 5k would now have a value of £32,500.

The current yield is 4%, income of £1,300, a yield on seed capital of 26%

If you want to buy it may better to wait for the next market downturn and the yield will increase.

The SNOWBALL

History of the SNOWBALL.

All trades for the SNOWBALL are posted here as soon as they are made.

All buys include a cost of £10 and sales a cost of £5, although you should be able to trader at a lower cost. Costs add up over the years but if sales are made at a profit, however small, it’s the markets money and not yours, as a profit is not a profit until the underlying share is sold.

The SNOWBALL’S first full year of earning dividends was 2023 and the current updated fcast for this calendar year is 12k.

If we look forward to the next 4 years the income stream will be around 16k, hopefully it will be ahead of the fcast.

That equates to a yield of 16% of seed capital, to make comparisons easier no new funds will be added to the SNOWBALL.

Once the SNOWBALL earns 15k of income every year, future dividends could be re-invested into safer but lower yielding shares, as the SNOWBALL prepares itself to drawdown the cash rather than re-invest it.

At present the SNOWBALL invests mainly in UK Investment Trusts as they have both higher yields and trade at bigger discounts to NAV.

IF this no longer applies the dividends will be re-invested into higher yielding ETF’S.

If you have more years of re-investing, you should build up an income stream and have a surplus to re-invest even though you are in drawdown.

Tim Plaehn

Why This BDC Trades Below NAV—for Now

by Tim Plaehn

April 29, 2026 6:00

Main Street Capital Corp (MAIN) has been one of the best-performing stocks in the business development (BDC) sector over the long term. Because of its success, MAIN trades at a steep premium to NAV and sports a lower yield than all of its BDC peers. So, I want to introduce you to a MAIN alternative with some great appreciation potential and yield.

Since its 2007 IPO, the MAIN share price has appreciated by 268%, and with dividends reinvested, it has provided a 1,630% total return. That total return works out to a 16.6% compound annual growth rate.

Looking at shorter-term past performance, its five-year total return was 91.8%, or 13.9% annual compounding. The returns from MAIN have far outrun the dividend yield, which is 5.7% based on the current regular monthly dividend rate.

The MAIN returns have been boosted by steady NAV appreciation and regular, significant supplemental dividend payments.

On January 30, 2025, Main Street Capital announced the public offering and NYSE listing of shares of MSC Income Fund (MSIF). MSIF is an externally managed BDC managed by Main Street’s registered investment advisor.

The MSIF IPO price was $15.53 per share. The BDC currently trades for $12.86. Since the IPO, MSIF has not been a great pick for investors.

However, what the investing public has failed to grasp is that the MSIF portfolio mirrors the investments held by Main Street Capital. For example, here is an excerpt from a recent Main Street press release (emphasis added):    

  Main Street Capital Corporation (NYSE: MAIN) (“Main Street”     ) is pleased to announce that it recently completed a follow-on investment in its existing portfolio company, UBM ParentCo, LLC, doing business as United Business Mail (“UBM” or the “Company), a leading provider of “marketing mail” commingle services, specializing in optimizing postage, transportation and delivery performance for large-scale mailers. Main Street, along with its co-investor MSC Income Fund, Inc. (NYSE: MSIF) (“MSIF”), made the follow-on investment in UBM to support the Company’s strategic acquisition of a leading national provider of asset-light palletized mail consolidation, mail optimization services, freight brokerage, and warehousing and distribution for business to business, or B2B, and business to consumer, or B2C, customers. Main Street’s portion of the investment consisted of an additional $15.6 million first lien, senior secured term debt investment. Main Street and MSIF initially invested in UBM in December 2025.

MSIF trades at a deep discount to the MAIN valuation. MSIF trades at 83% of NAV, compared with MAIN’s premium valuation. MSIF has a current yield of 10.9%.

My thesis is that as MSIF develops a longer track record, and investors start to realize that its portfolio reflects the MAIN investments, the MSIF share price will climb to a premium to the current NAV of $15.55.  

Across the pond

ABOUT HIGH YIELD DIGEST

High Yield Digest is your weekly shortcut to income. Each issue highlights 10 of the highest-yielding stocks about to go ex-dividend in the coming week, complete with key dates and payout details.

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