Does Main Street Capital's Dividend Still Come Out of Earnings, or Out of the Balance Sheet?

Main Street Capital offers a 7.5% dividend yield, but investors should understand its two-part structure. The regular monthly dividend is safely funded by interest income from loans to private companies, while the supplemental quarterly dividend comes from investment gains and is not guaranteed. During economic downturns like COVID-19, supplemental dividends can be eliminated, making the stock suitable only for income investors who understand the risks.