Stephen Simpson, CFA
Long only, growth at reasonable price, value, research analyst

Gladstone Capital Is Seeing Better Credit, But Growth Is A Concern

Business Development Companies like Gladstone Capital (NASDAQ:GLAD), Full Circle (NASDAQ:FULL), Ares (NASDAQ:ARCC), and Kohlberg Capital (NASDAQ:KCAP) have to strike a balance between growing their portfolio (which drives future dividend growth) and compromising value and credit quality in doing so. Gladstone has made some good progress since my December writeup in terms of credit quality, with non-accruals and unrealized losses both shrinking. While portfolio growth is still a concern (as is management's need to waive fees to protect the dividend), there's an interesting mix of value and income here for more risk-tolerant investors.

Credit Getting Better

It's still early in the reporting season, but many of the banks that have reported so far, including banks...

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