Investors, however, are more concerned with their 9% dividend yield than some crazy ice cream flavors offered by one of Gladstone's portfolio companies. So while I can tell you that the Pear & Blue Cheese ice cream is actually quite good (I've had it), I'll have to do a little work to see whether we can say the same about Gladstone's dividend. The company's net investment income has been steadily rising, which we like to see even more than we like to see chocolate combined with peanut butter. Last year, Gladstone generated $41 million in net investment income while paying out $35.4 million in dividends for a payout ratio of 86%. Since BDCs must pay out at least 90% of their net income (which is different from net investment income), I'm comfortable with payout ratios of up to 100%. In 2024, net investment income is forecast to rise to $44.6 million, which would lower the payout ratio to 84%. But while Gladstone's track record of growing its net investment income is impressive, I do have one concern about its dividend history... |
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