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TICC Capital Corp. (TICC) is a business development company, primarily engaged in providing capital to technology-related companies. The company focuses its investments on companies having annual revenues of less than $200 million and/or a market capitalization or enterprise value of less than $300 million. Its investment objective is to maximize the portfolio's total return. This is achieved primarily through investments in corporate debt securities. The company's individual investments generally range from $5 to $25 million, diversifying among a large number of investments, with few exceeding 5% of the total portfolio.

Proven Track Record

Management has a long and successful history analyzing the types of investments that TICC focuses on. Jonathan H. Cohen, the Chief Executive Officer, has more than 21 years of experience in debt and equity research and investment. Mr. Cohen is also the Chief Executive Officer of T2 Advisers, LLC, the investment manager of Greenwich Loan Income Fund Limited. Earlier in his career, Mr. Cohen managed technology research groups at Wit Capital and SoundView Technology Group, managed securities research groups at Merrill Lynch & Co. and was named to Institutional Investor's "All-American" research team in 1996, 1997, and 1998.

Reliable Dividend

The company's current yield is over 11%, and based on its payment history, I believe the distribution will continue to increase as will the stock price. As the chart below illustrates, TICC has consistently made its dividend payments, and other than during the financial crisis in 2008 and 2009, the dividend payment has been increasing and is now increasing again. Should the markets avoid another crisis, it appears the dividend is headed back to pre-crisis levels over $ .30/quarter.

Dividends

Ex-Dividend Date

Record Date

Pay Date

Amount

Frequency

3/19/2012

3/21/2012

3/30/2012

0.2700

Quarterly

12/14/2011

12/16/2011

12/30/2011

0.2500

Quarterly

9/14/2011

9/16/2011

9/30/2011

0.2500

Quarterly

6/14/2011

6/16/2011

6/30/2011

0.2500

Quarterly

3/17/2011

3/21/2011

3/31/2011

0.2400

Quarterly

12/8/2010

12/10/2010

12/31/2010

0.2400

Quarterly

9/8/2010

9/10/2010

9/30/2010

0.2200

Quarterly

6/8/2010

6/10/2010

6/30/2010

0.2000

Quarterly

3/22/2010

3/24/2010

3/31/2010

0.1500

Quarterly

12/8/2009

12/10/2009

12/31/2009

0.1500

Quarterly

9/8/2009

9/10/2009

9/30/2009

0.1500

Quarterly

6/8/2009

6/10/2009

6/30/2009

0.1500

Quarterly

3/13/2009

3/17/2009

3/31/2009

0.1500

Quarterly

12/8/2008

12/10/2008

12/31/2008

0.2000

Quarterly

9/8/2008

9/10/2008

9/30/2008

0.2000

Quarterly

6/12/2008

6/16/2008

6/30/2008

0.3000

Quarterly

3/18/2008

3/21/2008

3/31/2008

0.3600

Quarterly

12/6/2007

12/10/2007

12/31/2007

0.3600

Quarterly

9/5/2007

9/7/2007

9/28/2007

0.3600

Quarterly

6/6/2007

6/8/2007

6/29/2007

0.3600

Quarterly

3/7/2007

3/9/2007

3/30/2007

0.3600

Quarterly

12/27/2006

12/29/2006

1/17/2007

0.1200

Special

12/6/2006

12/8/2006

12/29/2006

0.3400

Quarterly

9/6/2006

9/8/2006

9/29/2006

0.3200

Quarterly

6/7/2006

6/9/2006

6/30/2006

0.3000

Quarterly

3/8/2006

3/10/2006

3/31/2006

0.3000

Quarterly

12/28/2005

12/30/2005

1/18/2006

0.1200

Special

12/7/2005

12/9/2005

12/30/2005

0.3000

Quarterly

9/7/2005

9/10/2005

9/30/2005

0.2500

Quarterly

6/8/2005

6/10/2005

6/30/2005

0.2000

Quarterly

3/8/2005

3/10/2005

3/31/2005

0.1400

Quarterly

12/29/2004

12/10/2004

12/31/2004

0.1100

Quarterly

9/8/2004

9/10/2004

9/30/2004

0.1100

Quarterly

6/8/2004

6/10/2004

6/30/2004

0.1100

Quarterly

3/11/2004

3/15/2004

4/5/2004

0.1000

Quarterly

*Source: Yahoo Finance

The Stock is Headed Back to Pre-Crisis Levels as Well

TICC's stock took a hit with the rest of the market, and the financial services sector in particular, during the financial crisis in 2008 and 2009.

Click to enlarge

*Source: Yahoo Finance

The stock has rebounded strongly since the bottom and if the recovery in its shares and financial performance continues it should make its way back to 2007 levels of approximately $15/share. The company recently completed a stock offering to raise more capital to lend - which will generate income for the company and help drive increases in its distributions. DividendChannel agrees, recently naming TICC a Top Ten dividend paying financial stock, saying:

TICC displayed both attractive valuation metrics and strong profitability metrics. For example, the recent TICC share price of $10.05 represents a price-to-book ratio of 1.1 and an annual dividend yield of 10.75% - by comparison, the average stock in Dividend Channel's coverage universe yields 3.8% and trades at a price-to-book ratio of 1.9. The report also cited the strong quarterly dividend history at TICC Capital Corporation, and favorable long-term multi-year growth rates in key fundamental data points.

Insider Buying Supports Bullish View

There is rarely a better indication of a stock's future direction than insider buying in the open market. At the end of 2011, TICC insiders were actively buying shares in the company.

Conclusions

In a world where yield is almost impossible to achieve, TICC offers investors an almost unthinkable yield of over 10%. The company's strong management navigated successfully through the most severe financial crisis of our time and now continues to increase the dividend, approaching pre-crisis performance levels. If performance continues on this strong path, investors hungry for yield in their portfolios will also drive the shares price higher. It's not often investors get paid 11% to hold a stock with over 50% capital appreciation upside. I believe TICC is a must-own for all investors seeking yield and stock appreciation.

Source: TICC Capital: My Favorite Stock For Yield And Appreciation