BIZD: Attractive Double-Digit Yields For Income Investors (Archive)

This 5-Minute Pitch was originally published on Seeking Alpha before the launch of the Hunting Alphas website. It is shared here to showcase my previous work and track record. New 5-Minute Pitches published on this site will not be disseminated anywhere else.

Elevator Pitch

• BIZD is a moderately concentrated BDC ETF with a double-digit yield, making it attractive for income-focused investors.
• It looks like only the largest BDCs are faring well in deal activity, growing the size of their investment portfolios from which it generates net investment income.
• A tightening of investment spreads is a broad-based headwind affecting the BDC sector and hence BIZD.
• Basel III Endgame deregulations for banks can increase competition for BDCs, making it harder for them to find good investment opportunities.
• My bottom-up valuation of BIZD shows that it is trading at a premium to 3-year historical averages. BIZD vs SPX500 technicals give an unclear directional outlook. But BIZD technicals look bullish, making it a good option for income-seeking investors.

Read the full article here.