BlackRock Capital Investment Corp

Prospect Capital Corporation (PSEC) released its earnings report for fiscal 3Q18 on May 9. The results were for the quarter that ended on March 31.

In fiscal 2Q18, Prospect Capital’s (PSEC) total investment income was $162.4 million compared to $183.4 million a year earlier.

Prospect Capital (PSEC) incurred total operating expenses of $89.2 million in fiscal 2Q18 compared to $99 million in fiscal 2Q17.

Prospect Capital’s (PSEC) management has indicated a positive view on the company’s future.

Prospect Capital (PSEC) has made first lien, senior, and secured debt a priority in terms of originations because this will help it to hedge downside risk.

Prospect Capital has a PE (price-to-earnings ratio) of 8.61x on a next-12-month basis compared to its peer average of 8.41x, implying Prospect’s higher valuation.

Prospect Capital (PSEC) generated NII (net investment income) per share of $0.20 in its fiscal 2Q18, which ended on December 31, 2017.

Prospect Capital (PSEC) is registered as a business development company (or BDC), which means that if it pays 90% of its profits in dividends, it won’t have to pay any taxes.

Prospect Capital (PSEC) has seen a decline in yields in recent quarters to 9.9% compared to a high of 13% in 2016.

Prospect Capital’s (PSEC) exits and repayments have largely been in debt-related investments.

Prospect Capital (PSEC) managed originations of $222 million, which was lower than the prior year’s number. Its exits and repayments stood at $258 million.

Prospect Capital (PSEC) has experienced yield compression in recent quarters, largely due to its efforts to reduce risk and focus on quality credit.

As of September 30, Prospect Capital (PSEC) reported total investments amounting to $5.6 billion (fair value), a marginal fall from its total investments balance as of June 30.

Prospect Capital Corporation (PSEC) released its earnings report for fiscal 1Q18 on November 8. The company failed to meet the projections Wall Street analysts had set for earnings per share or EPS and revenues.

Prospect Capital has a market capitalization of $2.2 billion.

Prospect Capital has generated a return of 4.1% on its assets on a last-12-month (or LTM) basis.

Analysts have given a one-year price target of $6.88 per share on Prospect Capital stock, which reflects a marginal rise of 0.29% from its current price.

Prospect Capital (PSEC) declared total dividends of $1.00 per share in fiscal 2017, which is the same as it declared in fiscal 2016.

Prospect Capital (PSEC) witnessed a substantial fall in its originations in fiscal 4Q17, compared with fiscal 3Q17.

Prospect Capital’s (PSEC) total investments at fair value in fiscal 4Q17 stood at $5.8 billion, reflecting a marginal fall from $6.0 billion in fiscal 3Q17.

Prospect Capital witnessed a fall in its fiscal 4Q17 total investment income, from $193 million in fiscal 4Q16 to $166.7 million last quarter.

Prospect Capital (PSEC) reported EPS (earnings per share) of $0.19 in fiscal 4Q17, missing the analysts’ estimate of $0.21.

Of the 14 analysts currently covering Ares Capital Corporation (ARCC), four analysts rated the stock as a “buy,” six analysts gave “strong buy” ratings, and the remaining four analysts gave “hold” ratings.

Ares Capital Corporation (ARCC) currently has a price-to-sales ratio of ~4.6x.

Ares Capital Corporation (ARCC) is expected to declare a dividend of $1.52 per share in 2017.

In 2Q17, Ares Capital made exits valued at $1.8 billion.

Within one year, Ares Capital Corporation (ARCC) stock is expected to reach $18.21, reflecting a rise of ~11.0% from its current price.

Ares Capital Corporation (ARCC) posted its 2Q17 earnings report on August 2. ARCC reported its core earnings of $0.34 per share, missing the analysts’ estimate of $0.36 per share.

Although Prospect Capital (PSEC) has been delivering decent returns to investors, there has not been much change in the analysts’ ratings.

Analysts have given PSEC a one-year price target of $8.50 from the current price level, reflecting 0.7% growth.

About 70% of Prospect Capital’s portfolio is composed of first and second lien secured loans

In fiscal 3Q17, Prospect Capital’s total value of investments stood at $6.0 billion in 125 companies, compared to $5.9 billion in fiscal 2Q17 in 123 companies.

Prospect Capital’s (PSEC) originations decreased in fiscal 3Q17 to $449.6 million compared to $469.5 million in fiscal 2Q17.

Prospect Capital (PSEC) reported a decline in its net investment income in its fiscal 3Q17 earnings. Analysts expect PSEC’s fiscal 4Q17 EPS to reach $0.20, representing no change from fiscal 3Q17.

In February 2017, 12 of the 17 analysts covering Ares Capital, or ~71%, have rated it as a “buy” or a “strong buy.”

Ares Capital stock has risen ~11.7% over the past six months. The company saw a strong performance in 4Q16 on higher deployment, stable yields, and expense management.

Ares Capital has consistently enhanced its exposure to second lien debt in a bid to generate higher yields. In 4Q16, its second lien debt made up 33% of its new commitments.

Ares Capital’s (ARCC) portfolio totaled $8.8 billion at fair value on December 31, 2016. Its total assets stood at $9.2 billion.

Analysts’ ratings for Ares Capital Ares Capital’s (ARCC) analyst ratings have improved over the past few months due to rising earnings and originations. So far in February 2017, twelve of the 17 analysts covering the company have rated it as a “buy” or a “strong buy.” Five analysts rated it as a “hold.” Since January 2017, Ares […]

Stock performance Ares Capital (ARCC) stock has risen ~14% over the past six months and 37% over the past year due to improved operating performance. In 3Q16, the company saw higher deployments and yields, and lower expenses. The company declared a dividend of $0.38 per share in 3Q16, in line with that of 3Q15. With a dividend […]

Second-lien preference Ares Capital (ARCC) has consistently increased its exposure to investments in second-lien debt to garner higher yields. In 3Q16, second-lien debt made up 23% of its new commitments and exits made up 18%. Second-lien loans formed 32% of the company’s total portfolio, and first-lien senior secured loans fell to 25% from 29% in […]

Broad markets driving statistics Ares Capital’s (ARCC) portfolio valuation and total assets stood at $8.8 billion and $9.1 billion, respectively, on September 30, 2016. The company’s corporate borrowers posted last-12-month EBITDA (earnings before interest, tax, depreciation, and amortization) growth of ~7% due to adequate growth and repayment capability. In 3Q16, Ares Capital’s credit statistics fell, with non-accrual […]

Analysts’ ratings for Prospect Of the eight analysts covering Prospect Capital (PSEC), two rated it a “buy” or “strong buy” in January 2017. Three analysts, or ~37.5%, rated it a “hold.” One analyst rated Prospect an “underperform” and two analysts rated the company a “sell.” Prospect’s mean target price is $8.05 per share, implying a fall of 7.9% […]

Generating strong yields Prospect Capital’s (PSEC) valuation gap has narrowed more than its industry peers’ and the broader market’s (SPX) (SPY), reflecting improved performance over the past few quarters. The company didn’t provide any further guidelines on possible spin-offs of profitable divisions in a bid to raise capital. If the stock rises, at least above the […]

Exits higher than origination In fiscal 2Q17, Prospect Capital (PSEC) made portfolio investments of $470 million, which is a substantial rise over the $347 million invested in fiscal 1Q17. These funds were deployed in new and multiple follow-on investments. The company saw higher net exits than it did in the previous quarter, in line with […]

In fiscal 3Q17, Apollo Investment (AINV) repurchased 2.3 million shares at a weighted average price per share of $5.90 for a total cost of $13.6 million.

Four of the 15 analysts covering Apollo Investment (AINV) rated it a “buy” or “strong buy” in January 2017.

On February 6, 2017, Apollo Investment (AINV) posted earnings per share of $0.17 in fiscal 3Q17, beating analyst estimates of $0.16.

In this series, we’ll look at Prospect Capital’s expected performance, deployments, portfolio strategy, yields, balance sheet strength, dividends, and valuations.

Currently, Apollo Investment (AINV) is trading at 8.5x on a one-year forward earnings basis. Its peers are trading at 8.8x.

Apollo Investment (AINV) posted earnings per share of $0.18 in fiscal 2Q17, compared to analyst estimates of $0.17. In this series, we’ll study AINV’s performance, yields, capital deployment, portfolio, dividends, and valuations.

BlackRock Capital Investment (BKCC) is expected to report EPS (earnings per share) of $0.23 in 4Q16, compared to earlier estimates of $0.25.

Closed-end funds have been deploying leverage in bids to take advantage of near-zero interest rates following the 2007 financial crisis.

Over the past few years, closed-end funds (PSP) have deployed funds in middle market companies with better credit ratings.

The availability of credit has led to higher competition among investors and closed-end funds (PEX) seeking better investment options.

Closed-end funds (PEX) have been targeting higher yields by investing in second lien—or marginally risky—offerings or companies.

Closed-end managers deploy money in middle market companies engaged in businesses across sectors by raising capital through share issuances.

Ares Capital (ARCC) stock has risen ~1.6% over the past six months. The company saw a strong performance in 3Q16 on higher deployment, yields, and lower expenses.

Ares Capital (ARCC) has consistently enhanced its exposure to second lien debt in a bid to generate higher yields.

Ares Capital’s (ARCC) portfolio totaled $8.8 billion at fair value as of September 30, 2016.

In fiscal 4Q16, Prospect Capital (PSEC) made $294 million in investments, a substantial rise compared to its investments of $23 million in fiscal 3Q16.

Prospect Capital (PSEC) is expected to post earnings per share (or EPS) of $0.24 in fiscal 1Q17, a fall of $0.01 compared to estimates.

Ares Capital (ARCC) is expected to post core EPS (earnings per share) of $0.39 in the third quarter compared to $0.41 in the prior year’s quarter.

Ares Capital’s (ARCC) net DE (debt-to-equity) ratio decreased to 0.73x on June 30, 2016. Management had targeted a DE ratio of 0.65x–0.75x.

Ares Capital (ARCC) has consistently increased its exposure to second lien senior secured debt. However, in the June quarter, second lien debt comprised only 24% of its new commitments.

Prospect Capital (PSEC) made portfolio investments of $294 million in the June quarter, a substantial rise from its investment of $23 million in the March quarter.

Closed-end funds (PEX) have been boosting their yields by deploying capital in marginally risky asset classes or companies.

As of June 2015, Ares Capital’s (ARCC) stock declined by ~5% over the past 12 months. The company paid a dividend of $0.38 per share—at par with the year before.

Ares Capital (ARCC) has consistently increased its exposure in second lien senior secured debt. It formed 26% of its total portfolio in 1Q15.

As of June 2015, Ares Capital (ARCC) stock has declined by ~5% over the last year. The company’s market capitalization has fallen to $5.16 billion.

Prospect Capital’s ~13% dividend yield is the highest of its investment management peers. Its recent stock troubles are due to declining yields.

Prospect Capital has managed to generate above-market yields through disciplined credit selection and a diverse origination approach.

Prospect Capital (PSEC) announced on May 6 that it has completed one new investment and several follow-on investments totaling $219 million in 3Q15, which ended on March 31, 2015.