Equities trade at elevated levels, yet contrarian investors seek income opportunities. We located them in an overlooked segment of the financial markets. In this area, yields range from 11% to 13%.

That is correct - up to 13%, available for as little as 68 cents per dollar of value.

What does this indicate? These vehicles currently change hands at reductions reaching 32% below their stated book values.

Our focus rests on business development companies, commonly called BDCs. These listed entities extend credit primarily to privately owned firms, including small and medium enterprises.

The BDC sector itself carries notable risks. Success hinges on timely repayment of extended loans. Skilled operators can achieve solid long-term results. The potential rewards draw some questionable participants, which contributes to a mixed reputation.

Yet within these uncertainties lie opportunities for value.

2026 has presented challenges for BDCs. Concerns over borrower credit quality have surfaced. This has led to outcomes where roughly one quarter of non-penny-stock BDCs have reduced payouts in recent months.

Difficult conditions all around.

Why consider this space for income? Three factors stand out.

BDCs commonly hold floating-rate obligations, allowing income to increase with rising short-term rates and decrease when rates fall. Elevated oil prices have delayed Federal Reserve easing, supporting BDC revenue stability.

Despite recent payout reductions, BDCs continue to rank among leading income sources. Few alternatives deliver comparable yields.

These equities seldom reach such depressed levels. Sector multiples sit near lows last seen during the pandemic. As contrarians, we examine the situation for potential recovery.

Now we examine these payers delivering yields from 11.8% to 13%. Our emphasis remains on sustainable value rather than declining payouts, so specifics count.

Nuveen Churchill Direct Lending Corp (NCDL)
Dividend Yield: 11.8%

BDC investments often involve alignment with leading asset managers. Consider Nuveen Churchill Direct Lending Corp. (NCDL), linked to Nuveen, the TIAA asset manager, and its affiliate Churchill.

NCDL directs capital toward U.S. middle-market firms supported by private equity sponsors. Holdings span 236 companies in 26 sectors, with emphasis on healthcare, pharmaceuticals, and business services. Risk distribution appears sound, as the largest ten positions represent only 13% of assets.

The firm primarily uses first-lien debt, much of it floating-rate, which can enhance income in higher-rate environments while potentially affecting demand.

Source: Nuveen Churchill Direct Lending Corp. Q1 2026 Investor Presentation

Nuveen Churchill Direct Lending possesses under three years of trading history marked by volatility. Amid a current downturn, shares trade at a 26% discount to net asset value.

What does this purchase entail?

A substantial yield exists, though it has declined gradually since inception. The original 45-cent quarterly plus 10-cent supplemental has changed. The supplemental ended first. The base then moved to 36 cents with a 4-cent addition, later reduced to 2 cents in Q2.

Gradual Reductions?

The share performance and payout adjustments appear at odds with solid operations. Non-accruals rose modestly yet remain low at 1.3% of portfolio cost, indicating strong credit metrics. Fee waivers improve the structure. Leadership brings conservative private-credit expertise. Software holdings stay limited.

Longer-term holders may see benefits. For now, the dividend receives careful management.

Blackstone Secured Lending Fund (BXSL)
Dividend Yield: 12.9%

Blackstone Secured Lending Fund (BXSL) draws on Blackstone (BX) and its Credit and Insurance division. Many BDCs provide more than capital; BXSL's 316 holdings gain operational insights from a major credit platform without additional fee burdens.

The portfolio centers on floating-rate first-lien debt to larger firms in lower-default sectors. Diversification holds, with top positions under 20% of assets.

While spread across nearly 40 industries, the leading sector raises caution.

Source: Blackstone Secured Lending Fund Q1 Earnings Presentation

BXSL experienced notable weakness in Q1. Non-accruals increased to 4.7% at cost and net asset value fell over 2% sequentially.

While peers adjust dividends, Blackstone Secured Lending has maintained 77 cents. Coverage came from net investment income this quarter, yet 2026 and 2027 projections suggest potential pressure ahead.

Shares have declined 20% since July 2025, elevating the static yield near 13%. Net asset value erosion limits deeper discount status, with current trading at a 9% discount to NAV.

Carlyle Secured Lending (CGBD)
Dividend Yield: 13.0%

Carlyle Secured Lending (CGBD) connects to Carlyle Group (CG). It targets middle-market companies backed by private equity and favors floating-rate first-lien debt.

CGBD differs through a concentrated portfolio of 60 companies. Financing includes under 85% first-lien at fair value, plus mid-single-digit allocations to second-lien, equity, and fund investments.

Source: Carlyle Secured Lending Q1 Earnings Presentation

A year ago, the first half of 2025 appeared troubled with consecutive earnings shortfalls, rising non-accruals, and no supplemental dividend.

Since then, mixed developments have occurred.

The distribution faced further reduction. After holding steady for quarters, April brought a 12.5% cut to 35 cents per share.

Recent results show improvement. NAV declined over 2% in Q1, yet net investment income exceeded forecasts and non-accruals fell to 1% after Alpine restructuring. Joint ventures Middle Market Credit Fund and Structured Credit Partners continue expansion.

Mid-2025 underperformance versus peers has persisted, though declines now align more closely with sector trends. This has placed CGBD at a 32% discount to NAV, among the lowest valuations in traded BDCs.

Barings BDC (BBDC)
Dividend Yield: 12.3%

Barings BDC (BBDC) previously operated as Triangle Capital until the 2018 rebrand aimed at moving past prior write-offs and reductions.

The change went beyond naming. It introduced an external advisor relationship with Barings to address portfolio issues.

Current strategy centers on private-equity-owned middle-market firms, with 5%-15% in non-sponsored upper-middle and opportunistic deals plus 5%-10% via Eclipse Business Capital and Rocade Capital. First-lien exposure stands lowest in the group at 70%. Equity comprises roughly 20%, with the balance in second-lien, mezzanine, and other instruments.

Source: Barings BDC Q1 Fixed Income Investor Presentation

Prior gains booked via Dividend Swing Trader keep BBDC under regular review for both short- and longer-term ideas.

Last year, small quarterly supplementals appeared after a decade without them. They proved temporary, yet the base payout supports a yield above 12%.

That yield carries forward risk. Earnings trail the distribution, relying on prior spillover to maintain coverage.

A recent positive note arrived with termination of a credit support agreement, generating a $67 million payment by month-end for new investments.

While BBDC showed relative resilience in 2026 with limited declines against broader sector drops, valuation remains attractive at a 23% discount to NAV.

Steer Clear of the Retirement Drawdown Cycle: Secure 8% or Higher for Life

These BDC yields stand clear. Now picture a portfolio built for 8% or greater returns without payout cuts, asset value erosion, or private-credit uncertainties tied to rate policy.

Such income proves essential as conventional methods fall short.

Observe the limits of the 4% rule. It functions until conditions shift.

Periodic market drops compel larger share sales at depressed prices, requiring stronger rebounds merely to recover prior value.

This creates a retirement drawdown cycle.

Market swings cause no concern here. An 8% No Withdrawal Retirement Portfolio generates sufficient income to rely solely on dividends and interest.

Even $500,000 can produce a $40,000 annual amount, far below typical CNBC projections.

Larger sums improve outcomes further.

Discover overlooked high-yield holdings at 8%, 9% or above that support lifelong income from distributions alone. Click here for details on these reliable options with attractive payouts!

Further CGBD Research:

Warren Buffett Dividend Stocks
Dividend Growth Stocks: 25 Aristocrats
Future Dividend Aristocrats: Close Contenders

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.