Fidus Investment Corporation Stock News

As a BDC bull, I've to admit that most BDCs are not good enough for being included in a durable retirement/passive income portfolio. In the article I share 5 specific criteria that we have to comply with to minimize dividend cut risk. I also share 3 concrete BDC picks, which I could easily see being included in the retirement income mix.

BDC investing is primarily about income with less emphasis on growth. One way to activate the second (price appreciation) component is through investing in heavily discounted BDCs. The other, more prudent approach is to invest in high-quality BDCs that should deserve higher premium, where from a price-to-value convergence, investors could enhance the total return performance.

Fidus Investment has delivered strong market-beating total returns through a disciplined investment approach and attractive dividends. FDUS's portfolio, comprised mostly of senior secured debt, has shown consistent growth, low non-accruals, and NAV/share accretion, supported by a conservative balance sheet. With a fair current valuation at a P/Book value of 1.12x, existing investors might want ...

Fidus Investment is one of my favorite BDCs, focusing on debt and equity financing solutions with a diversified portfolio of 85 companies. FDUS targets lower middle-market businesses, emphasizing niche market leaders, diversified customer bases, strong cash flows, and robust management teams. The portfolio is concentrated in IT Services and Business Services, making up 35.4% and 11.9% respectiv...

The usual sweet spot range for high and durable income is 6-8%. Anything above that tends to come with unfavorable financial risk. Yet, by being selective and careful, 8%+ exceptions can be found.

High inflation is a serious risk for sustainable wealth creation. One of the best ways to beat inflation and generate real value is devising a high yield strategy. Such a strategy comes with its own set of risks such as income reduction and inflation gradually over time exceeding dividends.

Fidus Investment offers a high dividend yield of 11.5%, supported by a well-structured portfolio of secured debt investments and consistent earnings. Despite trading at a slight premium to NAV, FDUS remains fairly valued compared to peers. The portfolio's overall credit quality remains solid, as non-accruals fall within a similar range as prior quarters.

The primary return source of BDC investments is dividend income. Yet, when there is a mismatch between price and value, it is possible to pocket attractive price returns as well. In this article, I share two BDCs that trade at 20%+ discount to their NAV and offer dividend yield starting from 13%.