Josh Arnold
Long/short equity

Full Circle Capital's Inferior Operational Performance Means Dividend Cuts Are Likely


Full Circle Capital (FULL) is a business development company that invests in and offers financing to small and middle market companies whose access to traditional financing is limited or nonexistent. The company has been public for roughly three years and, in conjunction with some volatility, shares are appreciably lower than the IPO price. However, FULL has distributed some very generous dividends in that time and more recently, the payout frequency has been increased to monthly and at present, the 7.7 cent per share monthly payout equals a 10.9% dividend yield. This huge yield, while providing significant current income to shareholders, is a red flag to me as it is very, very high. This would suggest the market doesn't believe...

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