Prospect Capital Corporation (PSEC), Apollo Investment Corp. (AINV): Look to Business Development Companies For Yield and Growth

When you consider the S&P 500 Index yields just over 2% and the 10-Year Treasury, even after its impressive drop in recent weeks, still yields just 2.59%, huge dividend yields such as these look even more attractive.

In the end, these stocks are not for the faint of heart. After all, financial companies employ leverage to enhance their returns, which as we all learned the hard way during the financial crisis, is a double-edged sword.

Under adverse market conditions, you should fully expect these stocks to exhibit volatility in both their underlying performance as well as their dividend payments.

If you’re not afraid to take some risk and want exposure to the financial sector, these companies are worthy of further research.

Robert Ciura has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

The article Look to Business Development Companies For Yield and Growth originally appeared on Fool.com and is written by Robert Ciura. Robert is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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