Published Thu, 01 Aug 2019 11:35:50 -0400 on Seeking Alpha
BDC Buzz Initiates Coverage Of CSWC
I am expanding coverage to include smaller and lesser-known Business Development Companies ("BDCs") with the potential to outperform due to being 'higher quality' as defined/discussed in "Assessing Risk: Retirement Portfolio Using BDCs Yielding 10%+" earlier this month.
I have added Capital Southwest (CSWC) to active coverage and included in the BDC Google Sheets along with its Baby Bond that trades publicly on the Nasdaq under the symbol CSWCL. CSWC is an internally-managed BDC with a $524 million portfolio with mostly first-lien debt positions and equity investments providing realized gains especially in its lower middle market investments similar to Main Street Capital (MAIN).
CSWC has increased its regular quarterly dividend each quarter since 2015 and equity participation is partially responsible for supporting continued quarterly supplemental dividends of $0.10 per share. The current dividend yield is around 9.4% (MAIN is currently 7.1%) which takes into account the recently announced $0.39 quarterly regular dividend and quarterly supplemental dividends of $0.10.
Source: CSWC 2019 Q4 - Results - Earnings Call Slides
As mentioned in the previously linked article, one of the many considerations when evaluating BDCs is management. This is likely the most important part of BDC analysis as management is responsible for building a portfolio to deliver returns to shareholders while protecting the capital invested. BDC... Read more
|Stock name||Last trade||P/E||Earnings/Share||Dividend/Share||Dividend yield|
|BLACKROCK KELSO CAPITAL||5.25||0.0||-0.12||0.56||13.61|
|HORIZON TECHNOLOGY FINANCE||11.85||9.5||1.25||1.20||10.12|
|OAKTREE SPECIALTY LENDING||4.90||0.0||-1.39||0.50||10.02|
|OAKTREE STRATEGIC INCOME||8.10||19.8||0.41||0.62||7.51|
|MAIN STREET CAPITAL||43.18||16.8||2.57||2.46||5.69|
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