Dividend Dispatch — Header
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| Dividend Dispatch |
| Income is everywhere. I find it. |
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| Monday, October 19, 2026·6 min read |
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Dividend Dispatch — Today's Theme
| Today's Theme |
| Saturday morning. Spreadsheet. Coffee. Two BDCs that still cover their base dividends. |
| I spent Saturday morning doing something most people would find deeply boring. I pulled up every BDC I follow — that's a Business Development Company, a firm that lends money to smaller businesses and has to pass the interest income to shareholders — and went line by line through their earnings coverage. The VIX closed at 20 on Friday. The Nasdaq 100 dropped 2.5%. Semiconductors fell for the eighth straight session. But Hercules Capital still earned $0.50 per share last quarter against a $0.40 base dividend — that's 125% coverage. Capital Southwest still sent out $0.1934 per share on September 30. Today: two BDCs that survived my screen, a safe pick in Aflac, and a red flag on Medical Properties Trust. |
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Trump Clears Way for New ‘Bank of Musk’ |
Something strange is happening. A few of the most powerful people in Congress are scrambling to stop Elon Musk’s latest innovation. Led by Senator Elizabeth Warren, who is fighting it tooth and nail. Meanwhile, Musk is rolling it out to millions of Americans… with the full blessing of President Trump and the U.S. Treasury. And starting January 18, he could take it one step further... issuing his own digital dollars. When that happens, his backers could make a fortune. |
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Dividend Dispatch — Section 1a
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The High Yield
Today's best dividend income ideas — 8%+ yields only
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| HTGCI keep coming back to this BDC — 125% dividend coverage at an 11.5% yield |
I found myself deep in BDC balance sheets on Saturday morning — yes, I know — and Hercules Capital was the first name that passed every filter.
Here's how a BDC works, because I think everyone should understand this: a Business Development Company raises money from investors, lends it to businesses at high interest rates, and the law requires it to pay out at least 90% of its taxable income as dividends. Think of it like being a bank, except instead of the bank keeping the profits, you get them.
Hercules lends specifically to tech and life science companies backed by top-tier venture capital firms. They've been at this since 2005 — through the financial crisis, the pandemic, multiple tech pullbacks. Last quarter they posted record investment income of $149.1 million, up 8.5% from a year ago. Net investment income hit $0.50 per share, covering the $0.40 base dividend by 125%. Non-accruals sit at just 0.1% at fair value.
Here's the risk: Hercules is venture-focused. With the Nasdaq 100 down 5.5% last week and semiconductors falling for eight straight sessions, a prolonged tech downturn could stress their loan book. That 0.1% non-accrual rate is excellent today — but it's a snapshot, not a guarantee. Q3 earnings should land in late October. I'll be watching closely. |
| Yield: 11.5% |
$10K invested = $1,148/yr |
Paid: Quarterly |
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Dividend Dispatch — Section 1b
| CSWC$92 a month from a single position — and the base dividend is backed by real earnings |
This one pays monthly. For anyone building a portfolio that throws off cash on a regular schedule, that monthly cadence feels like a paycheck.
Capital Southwest is a BDC — same structure as Hercules — but it lends to a completely different slice of the economy. CSWC focuses on lower middle-market companies: businesses with roughly $5 million to $25 million in annual revenue. Manufacturing firms, healthcare services, business software. Boring companies that need growth capital and pay solid interest rates for it.
The regular dividend is $0.1934 per share every month. On top of that, CSWC pays a quarterly supplemental of $0.06 — think of the supplemental as a bonus when earnings are strong enough. All together, that's $2.56 a year on a $23.11 stock — an 11.1% yield. Your $10,000 turns into about $92 hitting your account every single month.
Now I have to be straight about the math: including the supplemental, CSWC pays out more than it earns. Net investment income last quarter was $0.58 per share, which covers the $0.58 regular quarterly payout right at 100%. But add the $0.06 supplemental and total payout is $0.64 against $0.58 in net investment income. That supplemental can shrink or disappear — it's a bonus, not a promise. The regular monthly payment, though? Still covered.
Next ex-dividend date: November 13. |
| Yield: 11.1% |
$10K invested = $1,108/yr |
Paid: Monthly |
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Wall Street insider who called the rise of AI three years in advance reveals the next BIG breakthrough: |
"Accelerated AI" |
A radical "light-speed" device is set to make AI 100x faster… launch a new wave of AI winners… and leave the Magnificent Seven in the dust. |
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Dividend Dispatch — Main Rest
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Safety & Watchlist
Reliable picks + red flags
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| Safe Pick |
| AFL44 straight years of raises. A 0.52 beta. This is what safe looks like. |
Aflac. You know the duck. Here's what most people don't know about the company behind it.
Aflac generates most of its revenue in Japan — supplemental health and life insurance sold to Japanese workers who want extra coverage on top of their national health plan. The U.S. business is the one you see advertised, but Japan is the real engine.
The streak: 44 consecutive years of dividend increases. They raised 5.2% in November, bringing the quarterly payout to $0.61 per share. At Friday's close of $119.97, that's a 2.0% yield — $203 a year on $10,000. Not flashy.
But here's what I love: the beta is 0.52, meaning this stock moves about half as much as the overall market. On Friday, when the S&P dropped 1.09% and the VIX jumped to 20, AFL gained 1.6%. The P/E is 12.5. They bought back $983 million in shares last quarter alone. This is a stock that gets cheaper for the company to own more of, while paying you more every single year.
The risk to watch: the Japanese yen. A big swing in the dollar-yen exchange rate affects Aflac's reported earnings. The underlying insurance business is fine, but the currency translation shows up in the numbers and can rattle people. |
| Yield: 2.0% |
$10K invested = $203/yr |
Paid: Quarterly |
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| Red Flag |
| MPTA 12.0% yield I would not touch right now |
I know the yield looks attractive. 12.0% from a REIT — a Real Estate Investment Trust, a company that owns properties and passes rental income to shareholders — that owns hospitals. Sounds like it should be safe.
It's not. Medical Properties Trust has cut its quarterly dividend from $0.29 per share to $0.09 over the past three years — a 69% reduction. The main reason: Steward Health Care, one of MPT's largest tenants, filed for Chapter 11 bankruptcy in May 2024. Steward operated 36 of MPT's hospital facilities.
The stock has dropped from the mid-teens to $3.01. The 10-year compound annual total return is negative 7.6% per year. Wells Fargo recently cut its price target to $3.80 from $5.
I bring this up because I know someone reading this is looking at 12.0% and thinking about pulling the trigger. Don't — at least not without serious homework. A high yield after multiple dividend cuts is a warning sign, not an invitation. The 69% cut already happened. The question is whether the remaining $0.09 per quarter holds — and that depends entirely on whether MPT's other tenants keep paying rent. Earnings are due October 29. I'd wait for that report before going anywhere near this name. |
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The Extra Yield
This week's calendars, screens & answers
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| Weekend headline I loved: Phillips 66 (PSX) raised its quarterly dividend 4.7% on Friday — from $1.27 to $1.33 per share, payable December 1. A solid raise that landed while everyone was focused on the Nasdaq selloff. |
| Saturday screen results: I ran every BDC I follow through a dividend coverage filter — net investment income divided by base dividend. HTGC's 125% coverage was the best in my screen. CSWC's 100% was right behind it. The average across the group sat around 102%. |
| Someone asked me over the weekend: "How do I tell if a high yield is safe or a trap?" Shortest answer: does the company earn more than it pays? HTGC earns $0.50 and pays $0.40 base — that's 125% coverage. Safe. MPT cut from $0.29 to $0.09 in three years — trap. Always start with earnings coverage. |
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| The Dispatch |
I spent the weekend in BDC balance sheets so you don't have to. Today: Hercules Capital (HTGC) and Capital Southwest (CSWC) for 11%+ yields backed by real earnings coverage. Aflac (AFL) for 44 straight years of boring, beautiful raises. And a warning on Medical Properties Trust (MPT) — because a 12.0% yield means nothing if the dividend keeps getting cut.
Tomorrow: Dividend Aristocrats and Growth Stars. I've got two names with double-digit dividend raises and room to keep going. See you then. |
| — Charlie |
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Dividend Dispatch — Footer
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