Published Wed, 16 May 2018 09:53:34 -0400 on Seeking Alpha
Quick BDC Market Update As discussed in previous articles, business development companies ("BDCs") have been pulling back since May 2017. However, they have recently started to rebound and as mentioned in "BDC Buzz Begins Purchases Of Higher Quality BDCs," I have been buying additional shares of higher quality BDCs, especially given the oversold conditions driving higher yields.
Some of the positive changes in the BDC sector include:
Rising interest rates and portfolio yields Recent insider purchases Relaxed regulations and tax reform TCP Capital (TCPC) reported results last week with a meaningful increase in its portfolio yield from 11.0% to 11.3%:
"The overall effective yield on our debt portfolio at quarter end increased from 11% to 11.3% as we benefited from the increase LIBOR.”
Source: TCPC Earnings Call
There is a good chance that TCPC will be able to maintain or improve its portfolio yield in the coming quarters due to continued rise in LIBOR as well as new investments at higher yields as mentioned by management on the recent call:
“In the second quarter through May 8, we have invested approximately $57 million primarily in three senior secured loans. The combined effective yield of these investments is approximately 11.5%. At this point in the quarter our pipeline includes many transactions that are well within our historical yield range.”
“We have discussed the potential for rates to rise for... Read more
|Stock name||Last trade||P/E||Earnings/Share||Dividend/Share||Dividend yield|
Older articles featuring Apollo Investment (AINV):Prospect Capital's Updated Dividend And NAV Sustainability Analysis - Part 1 (Includes Fiscal Year 2019 Monthly...
Portfolio Update: Stocks Getting Slammed As Dividends Shine Bright
Main Street Capital's Dividend, NAV, And Valuation Vs. 14 BDC Peers (Post Q3 2018 Earnings) - Part 2
Tax-Loss Harvesting And Merger Fears Driving 10%+ Yield For BlackRock TCP Capital?
Ares Capital's Detailed Dividend Sustainability Analysis (Includes 2019 Dividend Projections)
Main Street Capital's Dividend, NAV, And Valuation Vs. 10 BDC Peers (Post Q3 2018 Earnings) - Part 1
24 'Safer' Dividend Financial WallStars For November Per Wizard Targets
Your 50 Financial WallStars Show Bountiful Yields With Net Gains For November 2019
PennantPark Floating Rate Capital: Well-Positioned With A Safe, 8.8%-Yielding Portfolio
Road To Financial Independence: Growing Dividends, Endless Opportunities But Limited Capital