American Capital Strategies: A 9% Yield that is Sustainable

American Capital Strategies (ACAS), which currently is trading around $41-42 a share, pays an enormous dividend of $3.68. This equals out to an approximate yield of 9%. More importantly, ACAS as a company has never decreased its dividend since its IPO in 1997. Furthermore, the company has raised its quaterly dividend 37 times according to Yahoo Finance. According to the company, $10,000 invested in 1997 in the Company's stock would be worth $69,584. That figures to a cumulative gain 595.8 percent. Whats more, is that the company has an above average credit rating compared to its peers and has very little exposure to the subprime fiasco accoring to its CEO, who spoke to this topic considerably in the company's most recent quaterly presentation. The company's success has even landed it a place on the S&P 500, a feet no other alternative asset manager has achieved. However, the company's share price has dropped recently because of worries about the subprime mess. The very subprime mess that ACAS has advoided. For investors, this presents a near perfect opportunity for high growth and significant income. For purposes of disclosure, I own shares of this company and has recently added significantly to my holdings.