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Apollo Investment: 12% Yield Supported By Improving Portfolio Quality

Published Tue, 26 Mar 2019 15:54:58 -0400 on Seeking Alpha

Current BDC Yields
As mentioned in previous articles, Business Development Companies ("BDCs") are priced based on expected returns to shareholders including regular and special dividends as well as realized capital gains and growing book values. The average BDC yield after taking into account special dividends is around 10% annually. BDCs with higher yields usually implies higher risk and/or expected credit issues driving dividend cuts and lower book values. Also mentioned in previous articles, I am expecting a handful of BDCs to announce dividend reductions in 2019 including MCC and TCRD as predicted in "Dividend Cuts For The BDC Sector" and dividend increases including TCPC discussed in "Dividend Increases For The BDC Sector: Part 5".
This article discusses the recently reported results for Apollo Investment (OTC:AINV) that is currently yielding around 12%:

Source: SEC Filings and www.bdcbuzz.com

AINV Dividend Coverage Update
For the quarter ended December 31, 2018, AINV reported between my base and best case projections, covering its dividend with slower-than-expected portfolio growth due to $291 million of sales repayments offset by only $305 million of new investments that were 98% into its “core strategies” that now account for 80% of the portfolio (previously 78%). The company repurchased 1.5 million shares at 24% discount to the previously reported net asset value ("NAV") resulting in an increased debt-to-equity ratio of 0.76 as... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
THL CREDIT 6.59   0.0 -0.51 0.84 12.52
MONROE CAPITAL 11.52   19.9 0.58 1.40 11.85
PENNANTPARK INVESTMENT 6.36   14.1 0.45 0.72 11.15
KOHLBERG CAPITAL 3.75   0.0 -0.25 0.40 11.05
PROSPECT CAPITAL 6.33   10.6 0.60 0.72 10.96
HORIZON TECHNOLOGY FINANCE 11.76   10.1 1.16 1.20 10.27
STELLUS CAPITAL INVESTMENT 14.02   7.8 1.81 1.36 9.97
HERCULES TECH GROWTH CAP 12.83   9.0 1.42 1.28 9.91
FIDUS INVESTMENT 15.92   8.5 1.87 1.56 9.89
TCP CAPITAL 14.43   20.0 0.72 1.44 9.80
WHITEHORSE FINANCE 14.50   5.9 2.46 1.42 9.77
PENNANTPARK FLOATING RATE CAPITAL 11.62   29.0 0.40 1.14 9.74
GOLDMAN SACHS BDC 19.83   21.3 0.93 1.80 9.12
GLADSTONE CAPITAL 9.42   31.4 0.30 0.84 8.97
ALCENTRA CAPITAL 8.41   28.0 0.30 0.72 8.90
ARES CAPITAL 17.86   9.2 1.95 1.60 8.87
SARATOGA INVESTMENT 24.20   9.3 2.59 2.20 8.70
SOLAR SENIOR CAPITAL 16.26   16.8 0.97 1.41 8.70
SOLAR CAPITAL 20.80   12.2 1.70 1.64 7.91
MEDLEY CAPITAL 2.50   0.0 -1.55 0.20 7.87
GOLUB CAPITAL BDC 17.82   14.6 1.22 1.28 7.26
GLADSTONE INVESTMENT 11.70   4.7 2.48 0.82 6.99
NEWTEK BUSINESS SERVICES 22.60   0.0 0.00 1.84 6.97
MAIN STREET CAPITAL 41.52   14.4 2.89 2.40 5.91

THL CREDIT - TCRD
THL CREDIT - TCRD  


Older articles featuring Thl Credit (TCRD):
10% Yielding New Mountain Finance Receives Fitch Rating
Dividend Increases For The High-Yield BDC Sector, Part 6: Gladstone Investment
Dividends By The Numbers For March 2019 And 2019-Q1
69 10%+ Dividend Yield WallStars Portend Ides Of March Fortunes
Dividend Increases For The High-Yield BDC Sector, Part 5: BlackRock TCP Capital
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

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