MAIN offers a 7% dividend yield but trades at a slightly high valuation; preferred entry price is ~$50/share.

Now, the next company's Main Street Capital, ticker symbol M A I N. Now, this one's really interesting because this one is a BDC or a business development company. It's part of the middle market lending industry.

Now these companies are interesting because when we jump over and look at their dividend you can see they pay a fairly good dividend. Their dividend yield right now is a bit over 7%

and one of the reasons for that is that business development companies have a tax advantage as long as they pay out most of their profits as dividends. So they pay out the dividends and then they don't have to pay corporate income tax like a lot of traditional companies do.

So you end up with a much higher dividend yield.

Now that could be good or bad. And you can see here that they have they so they have a great dividend yield. They have bought back some stock but you can see the debt has also gone up.

Now that's one of the negative sides to paying out most of your profits as dividends is that now if you want to expand a lot of times you got to raise debt or you got to issue stock. In this case they raise some debt.

Now their debt is by no means outrageous but that is something we should keep in the back of our mind that that is how this industry grows right they borrow money they lend money out this is kind of how that business works now interestingly this entire industry has been hurt over the past year or so there's been a lot of news around the private credit market and this company has been hurt partially because of that they're not necessarily a direct they're not directly part of the problem if you've seen a lot of the headlines out there, but they are kind of a casualty to it because for a while the private credit market, the stock price ran up.

This company was part of that. The stock price got run up and then a lot of those companies have been hurt and the stock has pulled back partially because it's been a bit overvalued.

Now, personally, I'd love to see this stock around 50 bucks a share. After my quick analysis, when we jump over and look at the price chart here, well, at about 50 bucks a share, you know, it has run up a little bit recently. 50 bucks a share, this one would be real interesting.

I come up with that number because when we jump over and look at price to book value, so price to book is a far better way to value pretty much any company whose product is money.

If you think about a bank or an insurance company or a lender like this, a lot of times price to book value is a better way to go than something like discounted free cash flow.

So looking at price to book value, it's slightly on the high end.

Now we could also try something like price to earnings per share price or price to earnings multiple. And here again it's a little bit on the high end. Both of those like to see pulled back just a bit.

I think $50 would be a great place for this stock.

But in the meantime, if we did own this, paying seven 7% a year from a dividend perspective, this could be a real interesting one.