TCP Capital (TCPC) - has been near the top of my BDC rankings for many reasons including recently beating EPS estimates by $0.10 or 26%, increasing NAV by 1.4% from the previous quarter, and raising its quarterly dividend to $0.36, which is more than covered by net investment income of $0.49 and demonstrates the earning power of the portfolio and an ability to continue increasing its dividend.
Business Development Companies ("BDCs") lend to small and mid-sized businesses, with limited financial leverage, paying out most of their income to investors and paying little to no corporate tax.
These are the five general criteria I use to evaluate BDCs:
- Profitability (EPS to cover dividends, NAV and EPS growth)
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