Is Main Street Capital Stock a Buy, Sell, or Hold With Shares 15% Below Their 52-Week High?

Main Street Capital (NYSE: MAIN) is a business development company (BDC) that distributes at least 90% of its taxable earnings to shareholders to avoid corporate-level taxation. Its yield is attractive, but its conservative nature makes the 15% drop from its 52-week high an opportunity for conservative investors. BDCs like Main Street Capital sell stock and issue debt to make loans to smaller companies that have limited lending options.

Main Street Capital charges high interest rates, preferring to make loans higher up in the capital structure. Its dividend is backed by strong net investment income and distributable income, with no cuts in the past. The current 5.6% yield, plus the supplemental dividend, brings the overall yield to around 7.6%. While not on The Motley Fool's top 10 list, Main Street Capital appears reasonable for conservative investors, given its valuation and strong dividend history.