$1,000 in Main Street Capital's 2007 IPO Is Worth About $7,300 Counting Dividends. It Has Never Cut Its Monthly Payout.

Investors looking for a good dividend-income stock may not find too many better than Main Street Capital (NYSE:MAIN).

The business development company (BDC) has raised its dividend for 19 straight years, every year since it went public in 2007 -- and has never once reduced its dividend.

And it has already raised its dividend for the first three months of 2027, putting it on track for 20 straight years of dividend raises.

Main Street Capital is also one of the relatively few dividend stocks that pay a monthly dividend, so the income stream comes more frequently than most.

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Why Main Street stands apart

BDCs, like real estate investment trusts (REITs), are required by law to pay out 90% of their taxable income in dividends in exchange for getting certain tax advantages. So they are literally built to generate dividend income.

Main Street Capital went public in 2007 as a BDC that focuses on providing debt and equity capital solutions for mostly smaller companies that can't get funding from traditional commercial banks or private equity partners.

But what makes it different, and superior to most, is that its portfolio is internally managed, as opposed to being managed by a third party, so it has lower fees because it doesn't pay fees to a third party. But it also takes an ownership stake in its companies, in addition to its loans, so it is more invested in companies' success and can directly benefit from their growth.

That has helped it steadily feed its dividend for 19 years. It currently pays out a monthly dividend of $0.265 through the end of 2026, up from $0.255 in the same period a year ago. Main Street Capital currently pays out a high yield of about 7.68%.

On Nov. 3, Main Street approved a $0.27 monthly dividend for the first three months of 2027 -- marking a 3.8% increase over the first quarter of 2026. This would be the 20th straight year of dividend increases for Main Street Capital. It also authorized an additional $0.30 per share supplemental dividend for December 2026 because of excess taxable income.

$3,500 in dividend income

Main Street Capital went public in October 2007 at roughly $15 per share. If you invested $1,000 in the stock at its IPO, that would have bought you roughly 67 shares. At its current share price of around $57 per share, that $1,000 would be worth about $3,800 today.

But then how much dividend income would you have accumulated?

Calculating all dividends declared to date, including the first-quarter 2027 dividends and the supplemental December 2026 dividend, Main Street will have paid $52.315 per share in cash dividends since its October 2007 IPO. If you multiply $52.315 times the 67 shares, you would have pocketed about $3,500 in dividend income, alongside the approximately 7.2% average annualized return you made on Main Street's stock since its IPO.

So, if you combined the dividend income with the capital appreciation, that $1,000 investment in 2007 would be worth about $7,300 today.

Dave Kovaleski has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.