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Solar Capital Ltd. Message Board

jan814_1999 2 posts  |  Last Activity: Feb 7, 2016 6:36 PM Member since: Apr 27, 2000
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  • Reply to

    TCPC Today

    by jan814_1999 Feb 3, 2016 6:28 PM
    jan814_1999 jan814_1999 Feb 7, 2016 6:36 PM Flag

    Hello Rob.
    As you point out, SCM (Stellus Capital) is one of the smaller BDC's. It has about a $120 million market cap. which places it 41st out of 52 publically traded BDC's based on market capitalization. With just $337 million in assets and a low share count (about 12.5 million shares), a BDC this small has less flexibility than the bigger boys during difficult economic times.
    Also SCM is not covering its dividend with NII, so it waives certain fees to help the situation, but does the waiver only in the fourth calendar quarter which makes calendar Q4 look great from an earnings standpoint, while Q1, Q2, and Q3 then return to NII well below the quarterly dividend of $.34 per share. KBW does cover SCM and the KBW NII projections suggest SCM will not cover its dividend in any quarter, without fee waivers, all the way through 2017. KBW has SCM rated as Market Perform with a $12.50 target price. The analysts community as a whole has SCM rated with two Buys and four Holds which is not an overwhelming vote of confidence. However, SCM is relatively attractive versus its peers (market cap of less than $200 million) when looking at price to book, dividend yield, and PE ratio on 2016 earnings. So it may work out just fine.
    I do nothing with REIT's so I have no opinion on UDF.
    Jan.

  • Reply to

    one of the Best of Breed

    by budwasgreat Feb 7, 2016 11:26 AM
    jan814_1999 jan814_1999 Feb 7, 2016 6:24 PM Flag

    Hi Bud.
    To answer your question, TCPC, per its last financial report, had two companies on non-accrual which amounted to .89% of portfolio cost and just .19% on a fair value basis(the fair value of the investments/portfolio fair value). Those are good numbers.
    KBW does have five other portfolio companies on their watch list but even if all five went on non-accrual (not a likely event) it would cost TCPC just $.07 per share annually which would still see TCPC covering its annual dividend with NII.

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