BDC dividends are eye-popping and might be cut, but are worth looking at

Bryce Rowe, senior equity research analyst for business development companies at National Securities, says that the current market turmoil has dropped prices -- expanding discounts -- while jacking up yields to massive levels, in some cases with payouts now set to be north of 30 percent. While he expects BDCs to dramatically trim those enormous distributions, he suggests that the compelling values and strong payouts -- which could stay near 10 percent even after cutbacks -- make it a good time to carefully consider adding business development companies to a portfolio for income and diversification.