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Ares Capital's NAV, Dividend, And Valuation Vs. 14 BDC Peers (Post Q2 2020 Earnings - Very Attractive Valuation)

Published Thu, 24 Sep 2020 08:18:51 -0400 on Seeking Alpha

Seeking AlphaDividend Ideas | Financials Ares Capital's NAV, Dividend, And Valuation Vs. 14 BDC Peers (Post Q2 2020 Earnings - Very Attractive Valuation)Sep. 24, 2020 8:18 AM ET|| About: Ares Capital (ARCC), Includes: AINV, BDCS, BIZD, BLK, FSK, GAIN, GAINL, GAINM, GBDC, MAIN, NEWT, NEWTI, NEWTL, OCSI, OCSL, ORCC, PBB, PBC, PFLT, PSEC, SLRC, TCPC, TSLXby: Scott KennedyScott Kennedy The REIT ForumThe #1 REIT Service Measured By Total ReturnsSummaryPart 1 of this article compares ARCC’s recent quarterly change in NAV, quarterly and trailing twelve-month economic return, NII, and current valuation to fourteen BDC peers.
Part 1 also performs a comparative analysis between each company’s investment portfolio as of 3/31/2020 and 6/30/2020. This includes an updated percentage of investments on non-accrual status.
Other metrics analyzed include each company’s cumulative realized gain (loss) per share, NII per share, price to annualized NII ratio, and percentage of income attributable to capitalized PIK income.
By providing these comparable sector metrics, this article sheds light on some useful quantitative data when assessing each company’s past, current, and likely future performance.
I also provide a list of the BDC stocks I currently believe are undervalued (a buy recommendation), overvalued (a sell recommendation), and appropriately valued (a hold recommendation).
Focus of Article:
The focus of PART 1 of this article is to analyze Ares Capital Corp.’s (ARCC) recent results and compare a handful of the company’s metrics to fourteen business development company (“BDC”) peers. This analysis will show past and current data with supporting documentation within two detailed tables. Table 1 will compare ARCC’s recent net asset value (“NAV”) economic return (loss), net investment income (“NII”), stock price to annualized NII ratio, and percentage of total investment income attributable to capitalized payment-in-kind (“PIK”) income... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
PROSPECT CAPITAL 6.71   16.8 0.40 0.72 10.76
APOLLO INVESTMENT 16.78   14.2 1.18 1.80 10.73
TCP CAPITAL 13.75   29.3 0.47 1.44 10.48
OAKTREE SPECIALTY LENDING 4.90   0.0 -1.39 0.50 10.02
PENNANTPARK FLOATING RATE CAPITAL 11.68   30.0 0.39 1.14 9.81
NEWTEK BUSINESS SERVICES 22.91   0.0 0.00 2.32 8.09
SOLAR CAPITAL 20.87   12.4 1.69 1.64 7.93
OAKTREE STRATEGIC INCOME 8.10   19.8 0.41 0.62 7.51
GOLUB CAPITAL BDC 18.55   15.7 1.18 1.28 6.89
GLADSTONE INVESTMENT 12.34   7.4 1.67 0.82 6.73
MAIN STREET CAPITAL 43.18   16.8 2.57 2.46 5.69
BLACKROCK 434.75   16.5 26.34 13.20 3.08


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