with PPS continuing to drop fast i cannot imagine that the current dividends can be sustained. what is particularly disconcerting is that MAIN is far under performing the market and the yield is not making up the difference to capital loss. am beginning to reconsider my position. seeing upgrades out there but experience says pay them little heed. they base their predictions on past performance while PPS movement usually dicates current and future expectations. anyone have anything? what the $#% is going on?
nadsmis. This thread is old so I won't comment on the PPS movements. But I did want to mention that you might want to research more on the BDC business structure. They do not set dividends based upon the strength of their PPS. Its based upon NII (net interest income) and the fact that they are taxed as a RIC (regulated business company).
thank you for your response. I am well aware of BDC workings. I own BKCC as well as MAIN. my point was not stated well. altho a BDC must return 90% of profits to shareholders, they must have earnings to support the dividends which equate to yield = div/PPS. nervous about BDC's in general right now what with interest rates rising. not just because T-bills become more attractive but affects the profitability of a BDC. similar to REIT's. nonetheless, I am holding and am somewhat more encouraged by rise of PPS this week. am content to realize a nice yield but not with the adverse relationship to capital gains loss. oh, BKCC sustaining share price and yield is nearly 11% there. good track record.
I had Main back when it was $14.00 a share. It went down and I was over $5,000.00 down. It went back up and I made $6,000.00. While I don't like the idea of it going back down, I'm still holding onto 1500 shares. even though I am back down $3100.00. And, I don't think it will go that far because of the positives. It has secured operating income for the next year so interest rates won't effect it in the near term and see below. Plus the street has a share price of $35.,00 a share. AND THIS IS BASED ON NEXT YEAR NOT LAST YEARS STOCK PRICE.
Top 4 Small-Cap Stocks In The Diversified Investments Industry With The Highest EPS Estimates
4:31a ET June 19, 2013 (Benzinga)
Below are the top small-cap diversified investments stocks on the NYSE and the NASDAQ in terms of earnings estimate for the next year.
Main Street Capital (NYSE: MAIN) may earn $2.16 per share in the next year ending December, 2014. Main Street's trailing-twelve-month revenue is $95.61 million.
thank you for your posting. bet you wish you had sold out, realized capital gains proft, and bought back in on the dip. that's what i plan on doing. altho i will play MAIN long, i expect (hope) i will be in and out realizing capital gains while i consider the good yield. trades only cost $7.49 each so, why not? i will watch the slide and maybe sell off and hope for a new low to buy back in. regardless, i like MAIN and am not nervous about simply running long and observing. that is why i have swapped out low yield stocks after the big run up this year to ride dividend stocks. just unhappy seeing how bad and how hard MAIN is getting hit. history means nothing. just because they recovered PPS before, there is zero guarantee they will again. interest rates are climbing. QE3 is easing. treasuries are up they come from investors dumping REIT's and the like (incl MAIN) to go guarantee yields with much lower risk to investment. let's see.... My sentiment is Hold (at best).
Care to elaborate why you feel MAIN's dividend us unsustainable?
MAIN has over-earned their dividend payout in each quarter over the last two years, plus they've had 5 dividend increases over this time period.
I'd be interested to hear your case why you feel the dividend is unsustainable.
The decrease is share price is because of the increase of the treasury rates. Flight to safety, in other words, people are selling main to buy treasuries because treasuries are backed by the us government (the fancy wall street types call it sector rotation). I'd rather keep my money in main. No hint of a decrease in earnings, expanding the portfolio, and management has a good track record. Now, this is all just my opinion and I am just some guy on the internet. But, if there is another dip, I will add to my position.
Least of my concerns is that there are people out there selling because of some irrational fear of interest rates going up. The dividend is based on earnings and there is nothing going on that would suggest that earnings are going to decline. We're being given a sale in this stock. You should be embracing that not running from it.
i understand. however, i am unwilling to wait until there is an earnings drop or dividend reduction. that happens, PPS drops big time. we both know that. if PPS continues to erode, and dividends remain constant, it is soon to the point that the yield will equal 10%. That occurs and you know darn well they will drop the dividend. also, it is not an irrational fear that interest rates are going to increase, they already are. esp mortgage rates. well, i will hold for now but am certainly not bullish on MAIN.