Latest news with #incomeStock
Yahoo
12-06-2025
- Business
- Yahoo
1 Incredible High-Yielding Monthly Dividend Stock I Plan to Buy in June for Passive Income
Main Street Capital has done an incredible job of paying dividends over the years The BDC pays a steadily rising monthly dividend and periodically pays supplemental dividends. It gives investors the comfort of a bankable recurring income stream and additional income potential. 10 stocks we like better than Main Street Capital › My ultimate financial goal is to become financially independent. My target is to grow my passive income to the level where it can cover my basic living expenses. That would eliminate the stress of having to work to pay my bills. I'm always on the lookout for new investments that generate passive income. One that I've surprisingly overlooked for years is Main Street Capital (NYSE: MAIN). However, after taking a closer look at the company, I've realized it's an incredible income stock. That's why I now plan to buy shares of the high-yielding monthly dividend stock this June. Main Street Capital is an investment firm that provides debt and equity to lower middle market companies, specifically those with $10 million to $150 million in annual revenue. It also provides debt capital to larger middle-market companies, up to $1 billion in annual revenue. These companies use this capital to support management buyouts, recapitalizations, growth, refinancing, and acquisitions. Main Street provides companies with a "one-stop" financing solution to help meet their funding needs. The company operates as a business development company (BDC). The IRS requires a BDC structured as a regulated investment company, which is Main Street Capital's structure, to distribute at least 90% of its taxable income to shareholders to avoid paying income taxes at the corporate level. That makes these entities similar to real estate investment trusts (REITs) or master limited partnerships (MLPs). Given that requirement, Main Street Capital pays an attractive dividend. It currently pays $0.255 per share each month, or $3.06 annualized. With its share price recently around $58 apiece, the company has a 5.2% dividend yield based on its monthly payment level. In addition to those monthly dividend payments, Main Street Capital has routinely paid supplemental cash dividends to ensure it reaches the 90% required payout level. The company recently declared a $0.30 per share supplemental dividend. If we annualize that rate and add it to the monthly payout, Main Street's yield is over 7%. Given the payout requirements of BDCs and the risks of providing capital to smaller companies, many of these companies don't have good records of paying reliable dividends. Their payouts can rise and fall, sometimes significantly, based on their earnings. What surprised me about Main Street Capital was the company's incredible record of paying monthly dividends. Since coming public in 2008, the company has never suspended or reduced its monthly dividend payment. Instead, it has increased its monthly payment level by 132% during that period. The company will hold its payout flat during recessions for extra wiggle room while growing it when the economy starts expanding again. It has increased its dividend by 2% over the past quarter and 4.1% over the last year. A stable and steadily rising income stream is exactly what I want because it can provide me with bankable income that can grow alongside my expenses. On top of that stable and growing monthly dividend, Main Street Capital routinely declares supplemental dividends. Since its IPO, the company has declared $7.24 per share of supplemental dividends. Add in the company's recurring monthly dividend, and it has paid a total of more than $45 in dividends since coming public. That's over three times its IPO price of $15 per share. The company designed its dividend policy to provide investors with significant comfort through a bankable monthly dividend. The current payment level is well below its distributable net investment income, with $0.75 in monthly dividends paid in the first quarter compared to $1.07 per share of distributable income. That gives it the flexibility to provide investors with additional income by routinely increasing its monthly payout and paying supplemental dividends. Main Street Capital has done an incredible job paying dividends over the years. It pays a very bankable monthly dividend. On top of that, it routinely pays supplemental dividends and increases its monthly payout. That rock-solid recurring income stream and upside potential are why I'm excited to add Main Street Capital to my income portfolio this month. I think it can supply me with a lot of income in the future, which should help me reach my goal of becoming financially independent even faster. Before you buy stock in Main Street Capital, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Main Street Capital wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $649,102!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $882,344!* Now, it's worth noting Stock Advisor's total average return is 996% — a market-crushing outperformance compared to 174% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 9, 2025 Matt DiLallo has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. 1 Incredible High-Yielding Monthly Dividend Stock I Plan to Buy in June for Passive Income was originally published by The Motley Fool
Yahoo
18-05-2025
- Business
- Yahoo
3i Group (LON:III) Is Increasing Its Dividend To £0.425
3i Group plc (LON:III) will increase its dividend from last year's comparable payment on the 25th of July to £0.425. Even though the dividend went up, the yield is still quite low at only 1.8%. We check all companies for important risks. See what we found for 3i Group in our free report. Even a low dividend yield can be attractive if it is sustained for years on end. However, prior to this announcement, 3i Group was quite comfortably covering its dividend with earnings and it was paying more than 75% of its free cash flow to shareholders. However, with more than 75% of free cash flow being paid out to shareholders, future growth could potentially be constrained. The next year is set to see EPS grow by 44.6%. If the dividend continues along recent trends, we estimate the payout ratio will be 11%, which is in the range that makes us comfortable with the sustainability of the dividend. See our latest analysis for 3i Group The company has an extended history of paying stable dividends. The annual payment during the last 10 years was £0.081 in 2015, and the most recent fiscal year payment was £0.73. This implies that the company grew its distributions at a yearly rate of about 25% over that duration. Rapidly growing dividends for a long time is a very valuable feature for an income stock. Investors could be attracted to the stock based on the quality of its payment history. We are encouraged to see that 3i Group has grown earnings per share at 88% per year over the past five years. A low payout ratio gives the company a lot of flexibility, and growing earnings also make it very easy for it to grow the dividend. In summary, it's great to see that the company can raise the dividend and keep it in a sustainable range. However, lack of cash flows makes us wary of the potential for cuts in the dividend's future, even though the dividend is generally looking okay. Taking all of this into consideration, the dividend looks viable moving forward, but investors should be mindful that the company has pushed the boundaries of sustainability in the past and may do so again. Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 7 analysts we track are forecasting for 3i Group for free with public analyst estimates for the company. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Yahoo
18-05-2025
- Business
- Yahoo
3i Group (LON:III) Is Increasing Its Dividend To £0.425
3i Group plc (LON:III) will increase its dividend from last year's comparable payment on the 25th of July to £0.425. Even though the dividend went up, the yield is still quite low at only 1.8%. We check all companies for important risks. See what we found for 3i Group in our free report. Even a low dividend yield can be attractive if it is sustained for years on end. However, prior to this announcement, 3i Group was quite comfortably covering its dividend with earnings and it was paying more than 75% of its free cash flow to shareholders. However, with more than 75% of free cash flow being paid out to shareholders, future growth could potentially be constrained. The next year is set to see EPS grow by 44.6%. If the dividend continues along recent trends, we estimate the payout ratio will be 11%, which is in the range that makes us comfortable with the sustainability of the dividend. See our latest analysis for 3i Group The company has an extended history of paying stable dividends. The annual payment during the last 10 years was £0.081 in 2015, and the most recent fiscal year payment was £0.73. This implies that the company grew its distributions at a yearly rate of about 25% over that duration. Rapidly growing dividends for a long time is a very valuable feature for an income stock. Investors could be attracted to the stock based on the quality of its payment history. We are encouraged to see that 3i Group has grown earnings per share at 88% per year over the past five years. A low payout ratio gives the company a lot of flexibility, and growing earnings also make it very easy for it to grow the dividend. In summary, it's great to see that the company can raise the dividend and keep it in a sustainable range. However, lack of cash flows makes us wary of the potential for cuts in the dividend's future, even though the dividend is generally looking okay. Taking all of this into consideration, the dividend looks viable moving forward, but investors should be mindful that the company has pushed the boundaries of sustainability in the past and may do so again. Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 7 analysts we track are forecasting for 3i Group for free with public analyst estimates for the company. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
