I will start with the year-to-date spreadsheet for my coverage universe of Business Development Companies, or "BDCs," and then start parsing the data to mine the lessons I can find. The lessons will be familiar to those who have read prior sector updates of mine: (1) Never buy an uncovered dividend as a long-term buy-and-hold investment, and (2) Never buy a falling NAV - or in this environment, a NAV that is falling greater than the sector average. Bad BDCs can reach valuations that are lower than they merit. One can profit from short-term trades in bad BDCs. But such trades require both skill and luck. The less one knows about BDCs, the more one should follow the two rules provided above.
BDCs 6-30-16
Yield in the spreadsheet below is based on the Q2-16 "regular" dividend. Spreadsheet header abbreviations: Div = dividend; EPS = earnings per share; LTM = last 12 months; YTD = year to date. The last four columns measure the percentage change in the 2016 EPS projection; the change in the price target since the beginning of the year; the change in the Q1-16 dividend from the Q1-15 dividend; and the change in NAV between Q3-15 and Q3-14. Special dividends are not included in this data. Ares Capital, Capitala Finance Corp., Fidus Investment, Franklin Square Investment Corp, Main Street Capital and TCP Capital have paid special dividends on a near regular schedule. Full announced 6-24 it will merge with Great Elm Capital Corp. to form not yet traded GECC.
| Share Price | Q1-16 | Price | YTD Percent Change | LTM | LTM | |||||||
| ------- The_Company_name_and_stock_ticker ------- | 1-01 | 06-30 | Yield | NAV | NAV | Price | Pr+Div | EPS | Target | Div | NAV | |
| Alcentra Capital Corporation | (ABDC) | 11.60 | 12.15 | 11.19 | 14.41 | 0.84 | 4.74 | 10.60 | -2.80 | -4.92 | 0.00 | -3.29 |
| American Capital Senior Floating | (ACSF) | 9.83 | 10.26 | |||||||||
