ETRACS 2xLeveraged Long Wells Fargo Business Development Company Index
The financial sector has finally gotten some upward momentum, and I expect the recent strength in bank stocks to broaden out to the rest of the sector, which includes insurance, brokerages and business-development companies (BDCs). The technical chart for ETRACS (NYSE:BDCL) has improved markedly, coming out of a basing process during the past month, and has cleared $20 and is looking to go higher. Yield 12.1%.
This buy recommendation is sporting the kind of yield I love. With BGC Partners (NASDAQ:BGCP), I’ll be catching what I believe is a sector coming out of a bottoming process. And if BGCP can afford this kind of payout in the current environment, I’m positive the rest of the year will bear out quite well for investors who take a position in it now. Yield 10%.
Cheniere Energy Partners
This company has secured yet another major contract with KOGAS of Korea, the the world largest importer of liquefied natural gas (LNG). LNG is America’s newest export commodity, and we arguably have the world’s largest supply. From the standpoint of getting LNG to foreign markets, Cheniere Partners (NYSE:CQP) has a virtual monopoly via its ownership of the Sabine Pass Terminal in southwest Louisiana. Yield 8%.
Dreyfus High Yield Strategies
High-yield corporate debt that carries a short duration in a recovering economy stands to perform quite well — especially with the yield on the 10-year Treasury note staying below 2%. I expect non-rated corporate bonds to trade back to their 2011 highs in the next six months, as these 10%+ yields take most of the guesswork out of beating the benchmark averages while paying out on a monthly basis. Dreyfus High Yield Strategies (NYSE:DHF) also has an attractive yield of 10.5%.
Fifth Street Finance
This BDC posted Q4 results of 27 cents per share, which matched estimates, and the company has announced the next three months’ dividends at the prevailing rate of 9.58 cents per share per month. At its current price, there is 20% to 30% upside potential from here. Fifth Street Finance (NASDAQ:FSC) trades ex-dividend today. Yield 11.19%.
Medical Facilities (TSE:DR) posted an in-line quarter and is looking to expand its footprint of acute-care facilities in the upper Midwest in 2012. This well-managed health-care provider, which owns a 51% interest in four facilities, offers a very stable monthly income stream that can’t be matched by any other stock or REIT in the industry. Yield 8.8%.
Mesabi Trust (NYSE:MSB) is an iron-ore income trust that will pay a dividend of 76 cents per share this month, equating to a 9.66% forward yield. There’s fresh positive sentiment surrounding the basic-materials sector amid improving data from China and the auto industry.
Possibly my favorite name in the BDC sector, Triangle Capital (NYSE:TCAP) gave back a point related to a 3.7 million share secondary offering that was priced at $19 last week. Use this dip to initiate and add to positions since the company is set to report another record quarter. Yield 9.9%.