I continue to be bullish on business development companies. They are filling the void left by decreased bank lending to mid-tier firms, pay extremely high yields and have very reasonable valuations. Here is another BDC I like.
Triangle Capital (NYSE:TCAP) - "Triangle Capital Corporation is a business development company specializing in private equity and venture capital investments. It focuses on leveraged buyouts, management buyouts, ESOPs, change of control transactions, acquisition financings, growth financing, and recapitalizations in lower middle market companies. The firm prefers to make investments in many business sectors including manufacturing, distribution, transportation, energy, communications, health services, restaurants, media, and others. It primarily invests in companies located throughout the United States, with an emphasis on the Southeast and Midatlantic." (Business Description from Yahoo Finance).
6 Reasons to pick up TCAP at under $20 a share:
- The stock yields a robust 9.6% and has tripled its dividend payments over the past five years.
- Insiders have been net buyers of the stock of the last six months.
- The stock looks like it has bottomed, is showing increasing technical strength and crossed its 200 day moving average earlier in the year (See Chart)
- It has a low five year projected PEG (.95) and sells for just over 9 times forward earnings.
- It has crushed earnings estimates each of the last four quarters.
- Revenues are showing impressive growth. TCP had around $36mm in sales in FY2010, should book over $62mm in revenue in FY2011 and analysts project revenues close to $76mm for FY2012.
Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in TCAP over the next 72 hours.