How Main Street Capital Corporation (MAIN) Has Become a Top-Tier BDC Dividend Stock for Income Investors

Main Street Capital Corporation (NYSE:MAIN) is included among the 11 Best BDC Stocks to Buy Now.

Main Street Capital Corporation (NYSE:MAIN) is a US lender that works mostly with smaller and mid-sized businesses. It provides customized debt and equity financing to companies that need capital to grow but aren’t large enough to tap traditional funding sources.

Most of Main Street Capital Corporation (NYSE:MAIN)’s earnings come from the interest it collects on loans, while its equity stakes bring in extra dividend income. As a business development company, it has to return at least 90% of its taxable income to shareholders, and it does that through steady monthly dividends. The company has built a strong track record on that front — it’s never cut or suspended its payout, and the monthly dividend has more than doubled since 2007. Over the past year, the company has raised its dividend twice, adding up to a 4.1% increase.

From time to time, Main Street Capital Corporation (NYSE:MAIN) also pays out special or supplemental dividends, usually once a quarter. These help it stay compliant with payout rules and give investors a little something extra. While these bonus payments aren’t guaranteed every quarter, Main Street has managed to issue them consistently since the end of 2021. The company’s monthly dividend comes in at $0.255 per share for a dividend yield of 4.86%, as of October 5.

While we acknowledge the potential of MAIN as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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