EPD now yielding only 4.3% that's low by MLP and other similar stuctured vehicles.
Most people buy MLP's and such for the yield the growth is an added bonus. As the yield drops the demand drops also as yield conciuos investors look elsewhere and with that causes limited growth. Why not invest in a BDC company ticker symbol PSEC that has the same structure as an MLP pays a distribution every month and is yielding 12 %, yes 12% that is not a typo. This company announces the disribution 4 months in advance so no guess work as to what it will be so you can budget around it. PSEC 12% EPD 4.3 % your choice.
PSEC is certainly not similar to EPD. EPD is low beta with real assets. It is understandable. PSEC is a financial company with financial assets as far as I can tell. It is not so understandable, and seems rather speculative. Speculative is not all bad. Speculative can pay off. Speculative can also fail to pay off.
Total Debt/Equity (mrq): 54.57 for PSEC seemed like a lot... but comparing to Total Debt/Equity (mrq): 125.51 for EPD makes me wonder. I suspect there is a reason that those numbers are not directly comparable, but I don't know.
BDCs cwertainly have a place in the investment arena. I own two and know PSEC. The problem is that the loans BDCs have out are speculative and the dividends often include a return of capital. Now look at a BDC in an economic downturn and what happened to their payouts and share prices. How can you compare a BDC with an investment grade company. Got to remember those that bought into EPD some 20+ years ago have gotten a better than 18% return!
PSEC sells for about 60% of its share price in 2005 and patys 1/4 the dividend they paid then. I think the long term return is a bit less than zero. Bottom line is there are better BDCs.
How do you figure PSEC pays only one quarter the dividend it did in 2005 ???? You need to learn how to read your education is weak and your math skills are pathetic. They paid quarterly back then now they pay monthly. Currently .11 every month in 2005 they paid .125, .15 .20 and .28 total of 75 .5 cents. Now they pay 1.32 yearly.
First of all PSEC was rated triple BBB, Insiders bought over 100,000 shares in June of 2013 alone. That tells me they are pretty secure in thier companies abilities and future performance. Looking in a rear view mirror to see what lies ahead is moronic how can you compare what happened to what will happen. I invest by what I see laid out in front of me Insiders recent buying at a feverish clip and a management team that is rated the best in the business and thier floating rate investments that will go up in value in a rate rising environment. EPD does not benefit from rising rates and will be hurt by cost of financing. PSEC will florish in an environment of raising rates and strong economic activity. PSEC 12% versus EPD's 4.3 % your choice.