Finance
This 12% Dividend Stock Has Income Growth
Date: 2026-01-27 20:00:01
My Portfolio & Connect: https://www.patreon.com/dividendbull
It’s now been almost five months since the Federal Reserve started cutting interest rates. In 2025, we saw three cuts that totaled 75 basis points. While the news has been good for nearly every type of high-yielding investment out there, there is one sector that’s been holding its breath. Business Development Companies are one type of company that pays high dividends but is negatively impacted by lower interest rates. Because most BDCs hold an overwhelming amount of floating-rate debt in their portfolios, a lower federal funds rate means lower earnings for these companies. And less income for business development companies means less income available to pay shareholders. With less income being generated, that would translate to dividends that are stressed or potentially cut.
And so what we’ve been seeing on various financial websites are news stories and articles about a supposed BDC armageddon. People are claiming that widespread dividend cuts are likely to occur among these companies. Over the past few months I’ve been talking regularly and providing updates on the outlook of this sector. And while we have seen BDCs report lower earnings and special dividends being reduced, most continue to perform as usual. We have seen a couple of dividend cuts in this sector, but the majority have come from companies that have long histories of being poorly managed. Monroe Capital recently slashed theirs, but they’re also in the process of merging. Goldman Sachs BDC recently went through a cut, and FS KKR has announced they’re in the process of evaluating their dividend, which always means they intend to cut it. One BDC however, recently announced that despite lower interest rates, their income is seeing growth compared to their last quarter, along with their net asset value. Additionally, they also recently announced that they would be paying a sizable bonus dividend in March.
Dividend Bull
PO Box 6913
Chandler, AZ 85246
