Buy These 8-10% Yielding Cash Cows For Total Returns

Core Viewpoint - Dividend-paying stocks are considered a good hedge against portfolio volatility, as they provide capital returns through cash dividends, which can buffer against down markets [1] Group 1: Blackstone Secured Lending (BXSL) - BXSL is a Business Development Company (BDC) managed by Blackstone, with a conservatively managed portfolio of $11.3 billion, 98.6% of which is in first lien debt [2][3] - The average loan-to-value ratio of portfolio companies is 47%, providing a significant equity capital buffer against potential losses [2] - BXSL has a strong balance sheet with a BBB credit rating and a debt-to-equity ratio of 1.13x, below the 2.0x statutory limit [2] - The weighted average yield on fundings is 10.9%, with 98.8% of debt investments based on floating rates, benefiting from the current higher interest rate environment [3] - Non-accrual rate is just 0.3%, and annualized NII return on equity is 13.2% [3] - NAV per share has grown for 7 consecutive quarters, reaching $27.19, with a 10% dividend raise this year [3] - BXSL is currently priced at $30.01, with a Price-to-Book ratio of 1.1x and a dividend yield of 10.3% [3] Group 2: MPLX LP - MPLX is a sizable energy midstream company with a strong presence in the U.S. Appalachia region and the Permian Basin, serving its largest unitholder, Marathon Petroleum [4][5] - Adjusted EBITDA has grown at a 6.4% CAGR and DCF at a 7.7% CAGR since 2020, with a 10% increase in shareholder distribution in both 2022 and 2023 [4] - During the first half of 2024, Adjusted EBITDA grew by 8% YoY, enabling MPLX to return $949 million to unitholders [5] - MPLX has a strong balance sheet with a BBB credit rating and a low 3.4x net debt-to-EBITDA ratio [5] - Current price is $42.43, with an 8.0% distribution yield and a Price-to-Cash Flow of 7.75x, indicating reasonable valuation [5][6] - MPLX's well-covered 8% yield, combined with conservative DCF growth estimates, could produce double-digit total returns [6] Group 3: Investment Opportunities - Both BXSL and MPLX present attractive opportunities for income-focused investors seeking high and well-covered dividends [7] - BXSL benefits from Blackstone's expertise and a conservatively managed debt portfolio, while MPLX offers an inflation-resistant distribution backed by strategic investments [7] - Together, they provide strong candidates for investors looking to mitigate market volatility with high income at reasonable prices [7]