July 24, 2012: Technology lender and Business Development Company Horizon Technology Finance (NASDAQ:HRZN) announced that earnings and the next dividend will be reported August 8th. The Analyst Consensus is for $0.34 in Net Investment Income, down from IQ 2012 Actual of $0.44 due to lower fees from early re-repayments and higher interest expense. BDC Reporter's estimate is higher, but we don't do much quarterly analysis or talk to company. We note the very high increase in new loans in period which could bring recurring Net Investment Income closer to $0.36. (No idea on Unrealized Appreciation or Depreciation). Going forward pushing down earnings per share will be impact of third quarter new equity raising.
BDC Reporter projects HRZN will maintain the current quarterly dividend at $0.45 for fourth quarter in a row. Long term, we are worried about a permanent gap developing between the $1.80 annualized dividend and per share earnings. Note that Analyst Consensus for FY 2013 is $1.58. Still, we don't expect dividend cut this quarter and HRZN may yet be able to catch up. BDC Reporter's pro-forma estimate is for HRZN to earn $1.88. (We're usually lower than Consensus so we'll be polishing this number after the next earnings report).
Stock at $16.27, down from $17.12 all-time high in early May, or 5% off. Price To 2013 Projected Earnings multiple is 10.3x. Yield is 11.1%.
Disclosure: I am long HRZN.