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Main Street: "Super 7"

09/07/2016 8:00 am EST


Mark Skousen

Editor, Forecasts & Strategies, High-Income Alert

In a slow-growth, low-interest rate economy, I expect the stock market to move up only modestly, and we could suffer a major correction in 2017, explains Mark Skousen, editor of Forecasts & Strategies.

After a six-year bull market, “the easy money has been made,” as they say. From here on out, we need to select our investments carefully. We are out of bonds, but dividend-paying stocks still look good.

One financial play we continue to recommend is Main Street Capital (MAIN), a business development company that recently reported second-quarter net income of $31 million, or 60 cents per share profits.

MAIN’s net investment income is sufficient to cover its monthly dividend payout, and is expected to grow enough to pay its newly announced monthly dividend of 18.5 cents per share — which yields 6.5%.

It is always important to watch carefully any non-performing investments. So far, only 0.5% of MAIN’s investments are in trouble. And only 1.7% of MAIN’s portfolio is in the energy sector.

Since going public in October 2007 at $15 a share, MAIN has paid out $18.33 in cash dividends, and has never reduced its monthly dividend.

Main Street Capital is the only publicly traded stock (of the 3,800 currently listed on U.S. exchanges) that pays a monthly dividend plus an additional bonus dividend every six months.

That’s why I call it the “Super 7 Annuity.” MAIN pays shareholders seven dividends every six months, or 14 in a year.

If its business model continues to be successful, it’s an ideal investment for those who want monthly income for the rest of their lives — and to pass on the investment to their heirs. In short, Main Street Capital is a money machine.

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By Mark Skousen, Editor of Forecasts & Strategies

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