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Tax-Loss Harvesting And Merger Fears Driving 10%+ Yield For BlackRock TCP Capital?

Published Wed, 05 Dec 2018 13:58:15 -0500 on Seeking Alpha

I consider BlackRock TCP Capital (TCPC) to be one of the most undervalued business development companies ("BDCs"), given its history and potential dividend coverage, supported by a higher quality portfolio and management as discussed in this article.
BDC Buzz & Insider Purchases
Over the last three months, the average BDC stock price declined by over 10% likely due to investors seeking higher yields on non-investment grade debt as discussed in previous articles. As shown below, BDCs started to rally as many reported strong Q3 2018 results, followed by another decline that could have been partially due to tax-loss harvesting and could keep prices lower through mid-to-late December (see discussion at the end of this article).

Also, there is a good chance that investors are continuing to discount TCPC's stock price due to the potential for a combination with BlackRock Capital Investment (BKCC) and was discussed on the recent call:
Q. I just wanted to ask does BlackRock seem to take into account the overhang TCPC stock seems to be primarily around the uncertainty surrounding what might happen in the future with BKCC, has there been any discussion about this, do they seem inclined to make an announcement on the future of what they want to do with this vehicle?
A. BKCC is a separate distinct legal entity and they make their own announcements and have their own independent board and investment committee. So I think it might be appropriate to... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
FS INVESTMENT 5.85   0.0 -0.07 0.76 13.13
BLACKROCK KELSO CAPITAL 6.00   0.0 -0.16 0.72 11.61
APOLLO INVESTMENT 15.72   18.5 0.85 1.80 11.52
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
OAKTREE SPECIALTY LENDING 4.90   0.0 -1.39 0.50 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
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