(1) Some of you may not remember 2008. Let's correct that right now. (There are tickers that no longer exist in this old data.)
(2) My weighting in BDCs is around 6%. I keep the allocation low in this sector because the risk is relatively high. Because my perceived level of risk is contained by my low allocation, the general tone of my updates can be overly complacent.
(3) Credit cycles do come to an end - and non-accurals go up at the end of the cycle. As a result, NII/share numbers fall - once covered dividends become uncovered dividends - dividend cuts happen. The current cycle is getting old.
The following numbers are posted so that you can be reminded what the bad times look like. We are headed towards bad times again. It is probably not in 2016. But it is probably before 2020. So . . .
(4) Keep your BDC weighting low. (5) You better be investing in others sectors in a way that generates some capital gains - because you will probably need fresh capital to replace the income losses that will happen when the credit cycle ends. (6) When things go downhill - that go that way in a hurry, and with no warning. (7) In a downhill environment - he who sells first wins. (8) Stay afraid - and stay vigilant. Never get complacent. If you can't do that, then you do not want to have money in this sector.
The old data:
BDCs 12-31-08
Note 1: MCGC suspended its dividend for the second half of 2008 [after cutting its div in Q2]. I cut the Q2 dividend in half in my data to show an optimistic forward div run rate. When ACAS suspended the div in Q4, I cut all four quarter's divs by 25% to show a projected div run rate - again debatable. When KFN suspended its div, my run rate was cut from $0.40 to $0.30. CSE, HCD and GNV have cut their divs in Q4. ALD will cut the div - and probably others too. TCAP's Q1-09 div increase is not the Q4 data.
Summation: Question every div based valuation because even the ones that are current may only be temporarily so.
| Share Price | 08 EPS Est. | Div/ | Q2-08 | Q3-08 | Price | YTD Percent Change | |||||||||
| Company | 1-01 | 12-31 | 1-01 | 12-31 | Yield | EPS | NAV | NAV | NAV | Price | Pr+Div | 08 EPS | Target | Div* | |
| ACAS | 32.96 | 3.24 | 3.46 | 2.86 | 92.59 | 104.90 | 27.01 | 24.43 | 0.13 | -90.17 | -81.07 | -17.34 | -36.67 | -27.17 | |
| AINV | 17.05 | 9.31 | 1.92 | 1.45 | 22.34 | 143.45 | 15.93 | 13.73 | 0.68 | -45.40 | -33.20 | -24.48 | -18.18 | 0.00 | |
| ALD | 21.50 | 2.69 | 1.26 | 1.49 | 96.65 | 174.50 | 15.93 | 13.51 | 0.20 | -87.49 | -75.40 | 18.25 | -47.65 | 0.00 | |
| ARCC | 14.63 | 6.33 | 1.62 | 1.47 | 26.54 | 114.29 | 13.67 | 12.83 | 0.49 | -56.73 | -45.25 | -9.26 | -24.22 | 0.00 | |
| BKCC | 15.28 | 9.86 | 1.63 | 1.68 | 17.44 | 102.38 | 12.31 | 11.52 | 0.86 | -35.47 | -24.21 | 3.07 | -7.14 | 0.00 | |
| GAIN | 9.81 | 4.91 | 0.87 | 0.66 | 19.55 | 145.45 | 10.77 | 10.57 | 0.46 | -49.95 | -40.16 | -24.14 | -27.54 | 6.67 | |
| GLAD | 17.01 | 8.09 | 1.80 | 1.41 | 20.77 | 119.15 | 13.97 | 12.89 | 0.63 | -52.44 | -42.56 | -21.67 | -11.11 | 0.00 | |
| GNV | 10.15 | 2.54 | 1.50 | 1.60 | 39.37 | 62.50 | 11.75 | 11.05 | 0.23 | -74.98 | -65.12 | 6.67 | -13.33 | -36.11 | |
| HCD | 8.57 | 2.15 | 0.97 | 0.70 | 13.95 | 42.86 | 7.24 | 6.69 | 0.32 | -74.91 | -71.41 | -27.84 | -45.45 | -71.43 | |
| HTGC | 12.42 | 7.92 | 1.30 | 1.19 | 17.17 | 114.29 | 12.21 | 12.75 | 0.62 | -36.23 | -25.28 | -8.46 | -16.84 | 13.33 | |
| KED | 22.91 | 7.51 | 1.09 | 1.44 | 22.37 | 116.67 | 23.51 | 22.19 | 0.34 | -67.22 | -59.89 | 32.11 | -9.29 | 5.00 | |
| KCAP | 12.00 | 3.64 | 1.60 | 1.57 | 38.46 | 89.17 | 13.14 | 12.97 | 0.28 | -69.67 | -58.00 | -1.88 | -37.94 | -5.71 | |
| MAIN | 14.01 | 9.77 | 1.19 | 1.16 | 14.74 | 124.14 | 13.02 | 12.49 | 0.78 | -30.26 | -19.99 | -2.52 | -3.13 | 9.09 | |
| MCGC | 11.59 | 0.71 | 1.78 | 0.87 | 76.06 | 62.07 | 10.31 | 9.39 | 0.08 | -93.87 | -89.21 | -51.12 | -66.78 | -69.32 | |
| MIC | 40.53 | 3.77 | 1.19 | 2.60 | 68.44 | 99.23 | 20.44 | 19.73 | 0.19 | -90.70 | -84.33 | 118.49 | -26.06 | 4.13 | |
| MVC | 16.14 | 10.97 | 1.43 | 2.71 | 4.38 | 17.71 | 17.18 | 17.33 | 0.63 | -32.03 | -29.06 | 89.51 | -9.35 | 0.00 | |
| NGPC | 15.63 | 8.37 | 1.28 | 0.95 | 19.59 | 172.63 | 14.08 | 14.34 | 0.58 | -46.45 | -35.96 | -25.78 | 5.18 | 19.35 | |
| PCAP | 10.09 | 3.64 | 1.33 | 1.21 | 27.47 | 82.64 | 10.08 | 9.74 | 0.37 | -63.92 | -54.01 | -9.02 | -36.33 | -25.00 | |
| PSEC | 13.05 | 11.97 | 1.87 | 1.91 | 13.45 | 84.29 | 14.55 | 14.63 | 0.82 | -8.28 | 4.06 | 2.14 | -7.50 | 2.55 | |
| PNNT | 10.02 | 3.61 | 1.28 | 0.87 | 26.59 | 110.34 | 10.77 | 10.00 | 0.36 | -63.97 | -54.39 | -32.03 | -22.59 | 9.09 | |
| TAXI | 10.02 | 7.63 | 0.84 | 0.85 | 9.96 | 89.41 | 9.95 | 9.99 | 0.76 | -23.85 | -16.27 | 1.19 | 4.76 | 0.00 | |
| TCAP | 12.40 | 10.20 | 1.47 | 1.33 | 14.90 | 114.29 | 13.73 | 13.76 | 0.74 | -17.74 | -5.48 | -9.52 | -7.09 | 42.31 | |
| TICC | 9.23 | 3.80 | 1.46 | 0.96 | 21.05 | 83.33 | 9.75 | 9.38 | 0.41 | -58.83 | -50.16 | -34.25 | -52.73 | -44.44 | |
| TTO | 12.25 | 4.45 | 0.90 | 0.10 | 23.82 | 1060.00 | 13.28 | 13.38 | 0.33 | -63.67 | -55.02 | -88.89 | -17.61 | 19.44 | |
| Pure BDC Average | 31.15 | 142.90 | 0.47 | -55.59 | -46.31 | -4.87 | -22.27 | ||||||||
| BDC-REIT Hybrids | |||||||||||||||
| CSE | 17.59 | 4.62 | 2.56 | 1.38 | 4.33 | 14.49 | 11.30 | 11.03 | 0.42 | -73.74 | -72.60 | -46.09 | -36.60 | -91.67 | |
| GOOD | 17.54 | 8.50 | 0.10 | 0.10 | 17.65 | 1500.00 | 16.29 | 15.60 | 0.54 | -51.54 | -42.99 | 0.00 | -3.62 | 4.17 | |
| KFN | 14.05 | 1.58 | 2.71 | 2.00 | 75.95 | 60.00 | 12.96 | 11.47 | 0.14 | -88.75 | -80.21 | -26.20 | -65.29 | -35.71 | |
| BDC-REIT Hybrid Average | -71.34 | -65.27 | -24.1 | ||||||||||||
| Sector Average | 31.32 | 185.34 | 0.46 | -57.34 | -48.41 | -7.00 | -23.71 | -23.71 | |||||||
| With the 10 Treasury at 2.219% and the sector average yield [on Q4 Divs] at 31.32% - the spread is 2910 basis points. *DIV - in the last column, the Div change is since the Q4-07 regular dividend. Some may have paid partial or initial divs [examples: KCAP, PNNT, TCAP] in Q4-07, so the increases are atypical and are not good run rate expectations. | |||||||||||||||