Apollo Investment Corp. (NASDAQ:AINV)

solid divdend will be maintained, will recover following europe stabylizing

I highly recommend Apollo Investment Corp (NASDAQ: AINV). AIC is structured as a Business Development Corporation and invests in senior secured, senior unsecured, and subordinated debt of large middle market companies. It is a high yield bond proxy and they have top-notch credit people that invest in quality credits, 60 to be exact, and dictate very favorable terms. They are very good at what they do and I would much rather own this than SPDR Barclays Capital High Yield Bond ETF that yield 8%. Apollo Investment Corp yields twice that at 16%. The company is generating current yields on their investments in the 10% to 12% range. That kind of return in this environment is pretty appealing. The stock yields more because it trades below book value, currently at 0.84x, the lowest ratio since 2009. There is a lot to like with this stock, but an investor must realize that the company marks their investments quarterly- creating significant volatility when credit spreads expand. The company managed through the global financial crisis with very limited non-performing loans, but because of market volatility the stock was whipsawed. If you can whether some volatility, which would mitigated in a diversified portfolio, then this is a good stock choice for 2012.