re: Stocks under $50 that pay a dividend

KYN is a fund

Yea I been using Chat got to run the numbers on a lot of different tickers. Starting with a 10k investment in each then adding 500 weekly split 35/35/30 it came back with QQQ, SCHD, SMH more times than not after changing the qualifications a bunch of times.

quote:

---

Share price absolutely matters if you want to spread the risk.

---

Just buy SCHD then.

quote:

---

The ONLY reason price might be relevant is if you were looking to employ a covered call strategy on DVD stocks.

---

Yeah, I don't get the diversication line either...

quote:

---

Kinder Morgan

---

kicking myself for not going all in on this after i read Smartest men in the room and Rich Kinder was clearly the smartest dude at Enron

quote:

---

Dafuq are you talking about?

It isn't paying a dividend on RH. It

---

wut

It pays .06/month on a $3.50 price. That's 20.5%.

Well shite your highness, you have the floor ….

quote:

---

There are several BDCs I own that are currently at a relatively steep discount

---

My problem with BDCs vs ECC:

--yields 20%, even after cutting the dividend more than 50%

--the discounts at present are way lower than they have been in past times of true stress

--BDCs basically mark the loans at par unless something really bad has happened. Similar to credit cards, the best month of all time usually precedes the worst month of all time, as all of a sudden, things are clarified

--BDCs aren't required to reserve for losses

--BDSc have very limited upside above theoretical NAV

ECC - where the collateral is broadly syndicated loans and not private credit:

--marks underlying positions to market - and the marks have been utterly brutal, even in the absence of any defaults or credit events. That is to say, you are buying something that has already been marked way down - not something waiting to be marked down

--trades at a much bigger discount to NAV (again, an NAV that represents brutal down marks)

--is required to carry "OC cushion" as a defense against losses. Essentially, this is a reserve bucket that BDCs don't have. Presently, the OC cushion is about the biggest it's ever been

--at least has the potential for upside beyond NAV, as it can and will attempt to buy loans at a discount to par and the ride them up. All of the capital gains in that scenario (beyond the ordinary income gains) accrue to the equity positions held


CLO equity had an extremely harsh February (on top of several months of under-performance). However, that is all market sentiment and mark-to-market. There have been no actual credit events of note, no defaults and certainly no stopped payments from the CLOs themselves. That is why I say there is a very real chance of a "melt up" as well as for a special dividend or two later in the year, as this thing is gushing cash that must be paid out