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Sector Pullback Drives 10.3% Yield For This Defensively Positioned BDC

Published Thu, 01 Nov 2018 08:38:45 -0400 on Seeking Alpha

Business Development Company ("BDCs") have been pulling back for the reasons discussed last week in "BDC Sector Volatility Driving 10.5% Average Yield". As mentioned in the article, the recent declines in BDC stock prices has not been driven by fundamentals especially as high-yield default rates continue to decline as mentioned this morning in "Corporate debt levels and default rates diverge". I am expecting a rally in BDC pricing later this quarter and likely through Q1 2019.
As shown below, New Mountain Finance (NMFC) has recently hit prices close to where it was during the previous pullback this year as discussed "NMFC: Is This 10.5% Yielding BDC Ready To Rally?" and is likely oversold again. As shown below, I have recently purchased additional shares for the reasons discussed in this article including:
Insider purchases at higher prices Increased dividend coverage through recent portfolio growth and higher use of leverage in the coming quarters Defensively positioned portfolio for later stage cycle concerns Strong credit quality and NAV per share stability Being oversold along with the entire sector (discussed at the end)
Recent NMFC Insider Purchases Last month, management was purchasing additional shares at higher prices of $13.70 to $13.77 and there is a chance that insiders will purchase additional shares after the current "blackout period" which will be after the company reports results on November 7, 2018... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
THL CREDIT 6.71   0.0 -0.33 0.84 16.07
FS INVESTMENT 5.85   0.0 -0.07 0.76 13.13
APOLLO INVESTMENT 15.72   18.5 0.85 1.80 11.52
MONROE CAPITAL 12.60   43.4 0.29 1.40 11.02
PROSPECT CAPITAL 6.57   13.1 0.50 0.72 10.86
PENNANTPARK INVESTMENT 7.06   11.8 0.60 0.72 10.21
HERCULES TECH GROWTH CAP 12.30   14.5 0.85 1.24 10.11
TCP CAPITAL 14.26   18.5 0.77 1.44 10.02
NEWTEK BUSINESS SERVICES 20.28   0.0 0.00 1.60 9.77
GLADSTONE CAPITAL 9.21   28.8 0.32 0.84 9.24
ARES CAPITAL 17.17   8.5 2.02 1.60 8.96
GOLDMAN SACHS BDC 20.60   15.5 1.33 1.80 8.74
SOLAR SENIOR CAPITAL 17.10   20.1 0.85 1.41 8.26
GOLUB CAPITAL BDC 17.90   13.6 1.32 1.28 7.11
GLADSTONE INVESTMENT 11.84   3.8 3.09 0.82 6.96
MEDLEY CAPITAL 3.20   0.0 -1.63 0.20 6.21
MAIN STREET CAPITAL 38.44   13.7 2.81 2.40 6.17
PENNANTPARK FLOATING RATE CAPITAL 12.98   13.8 0.94 0.76 5.90

THL CREDIT - TCRD
THL CREDIT - TCRD  


Older articles featuring Thl Credit (TCRD):
Strong Buy With 12% Yield With 30%+ Return Potential: TCG BDC
Dividend Increases For The High-Yield BDC Sector, Part 4: Main Street Capital
March Magic 10%-Plus Yield Dividend WallStars Flaunt Gains, Yields And Prices
Dividend Increases For The High-Yield BDC Sector, Part 3: TPG Specialty Lending
Dividend Increases For The High-Yield BDC Sector: Part 2
69 February 10%+ Dividend Yield WallStars Have Heart
Shutdown Could Be A Win For These High-Yield Venture Debt Providers
101 End-O-December 10%+ Yield Dividend WallStars Toast Tremendous Target Gains And A Merger
I Just Bought More TCG BDC, Which Is About To Rally With A Safe 13% Yield
18 'Safer' Dividend 10%+Yield WallStars Shine On Mid-December

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