Does Main Street Capital's Dividend Still Come Out of Earnings, or Out of the Balance Sheet?
Main Street's dividend is well supported, but you have to understand the nuances when you consider the lofty 7.5% yield.
Overview
Main Street Capital (NYSE: MAIN) is a business development company (BDC). Its 7.5% yield is well above the market's roughly 1%. But there are some issues to consider before you buy this stock. And the biggest comes down to how the dividend payment is made. Here's what you need to know.
Some online quote services will show Main Street's yield as 5.4%. Which isn't wrong, because the monthly dividend is $0.265 per share. If you multiply that number by 12 and divide by the recent stock price, you get roughly 5.4%. But Main Street has also paid an additional $0.30 per share in dividends each quarter in 2026. That same amount was paid every quarter in 2025 and 2024, as well. If you add that quarterly payment to the monthly dividend, you get a 7.5% yield.
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Originally published at www.fool.com.