From The Motley Fool · Reuben Gregg Brewer · · 1m
2 BDC Stocks That Outperform Regular Dividends
Main Street Capital and Hercules Capital offer high dividend coverage despite economic risks.
In brief
Main Street Capital and Hercules Capital offer high dividend coverage despite economic risks. Main Street Capital covers its regular dividend 130% while Hercules Capital covers it 125% with supplemental dividends that may cut during recessions. Originally reported by The Motley Fool.
BDCs' High Yield and Risk
BDCs offer high yields but carry significant risks due to volatile investment income.
Main Street Capital's Dividend
Main Street Capital pays $0.795 quarterly dividend with $1.04 distributable income in Q2 2026, 130% coverage.
Hercules Capital's Dividend
Hercules Capital pays $0.40 quarterly dividend with $0.50 net investment income in Q2 2026, 125% coverage.
Supplemental Dividends Explained
Supplemental dividends are extra payments when BDCs perform well, not a permanent income stream.
Dividend Coverage Comparison
Main Street covers regular dividend 130% while Hercules covers it 125% with both having room for economic adversity.
Risk During Recessions
Supplemental dividends may be cut during recessions but regular dividends remain protected by high coverage.
The headline
Main Street Capital covers its regular dividend 130% while Hercules Capital covers it 125% with supplemental dividends that may cut during recessions.
