Private equity and alternative asset classes have quickly become the “must have” for a variety of investors both big and small. And one of the best alternatives remains private credit opportunities and direct lending. For our latest Best High-Yield Dividend Stocks Model Portfolio pick and its investors, this niche has translated into plenty of dividend increases, with a 3-year annual rate of over 25%!
You can check out the Best High Dividend Stocks Model Portfolio to explore all the stocks.
The secret to our pick’s sauce remains the critical middle market. With bigger banks eschewing this market segment due to regulatory requirements, our pick has been able to swoop in and provide plenty of capital to those in need. With a fragmented lending environment, that’s often at above market rates. Even better remains our pick’s focus on senior floating rate loans. This provides plenty of inflation-protected increases to its cash flow.
Meanwhile, growth continues to be had as its large sponsor sends plenty of deals its way. Often those deals come with its backing and equity support, providing additional safety to our pick’s loan portfolio and ability to get paid.
With the current banking environment mirroring 2009, middle market lenders like our pick should have plenty to cheer about going forward – and their investors should cheer too.
In order to make room for our new lender distributor, we’ve removed an owner of shopping malls and other retail real estate.
