Best Business Development Companies for Income Investors

Published: 2026-07-08

Choosing the best BDCs for your portfolio requires evaluating dividend yield, total return, portfolio quality, and management expertise. Here is our analysis of the top BDCs across different investment objectives.

Best for High Dividend Yield

For investors prioritizing current income, several BDCs offer yields above 9%:

Prospect Capital (PSEC) offers a yield of approximately 12.5% with monthly dividends. Its diversified portfolio spans consumer, energy, and financial services sectors.

Hercules Capital (HTGC) delivers roughly 9.8% yield through its specialized venture debt strategy, financing technology and life sciences companies backed by top venture capital firms.

Blue Owl Capital (OBDC) combines a 9.5% yield with the scale and resources of Blue Owl's institutional platform.

Best for Total Return

Investors seeking both income and capital appreciation should consider:

Ares Capital (ARCC) has delivered strong total returns through multiple market cycles. Its scale and diversification make it a core BDC holding.

Main Street Capital (MAIN) offers a unique combination of monthly dividends and equity upside through its direct co-investment strategy.

Sixth Street Specialty Lending (TSLX) has a strong track record of NAV stability and total return performance.

Best for Defensive Portfolios

For conservative investors, BDCs with first lien senior secured loan focus include:

Blackstone Secured Lending (BXSL) invests almost exclusively in first lien senior secured loans, making it one of the most defensive BDC portfolios.

Golub Capital BDC (GBDC) emphasizes senior secured lending with strong underwriting standards.

Best Monthly Dividend BDCs

Monthly dividend payments provide consistent income streams. Notable monthly payers include:

  • Main Street Capital (MAIN) — 7.5% yield, longstanding monthly payer
  • Prospect Capital (PSEC) — 12.5% yield, monthly distributions
  • Gladstone Investment (GAIN) — 7.5% yield, monthly dividends with supplemental distributions