PennantPark Floating Rate Capital: A Solid 10.8% Yielding BDC Trading At A Discount

Summary

  • PennantPark Floating Rate Capital is a BDC trading at a small discount to its NAV, making it an attractive investment in comparison to many of its peers.
  • PFLT reported strong earnings with impressive revenue growth and low non-accruals in its portfolio, a testament to its portfolio quality.
  • The company has a solid balance sheet and tight dividend coverage, but potential for dividend increases in the future with growth in their JV portfolio.
  • PFLT has 100% of its debt investments in floating rate loans. With lower interest rates, this could lead to even tighter dividend coverage.

High Yield, Low Risk Road Sign

JamesBrey

Introduction

In today's market, it's hard to find high-quality stocks that are trading at great valuations. This is especially true in the BDC sector; it is very hard to find deals, with many of their share prices trading at premiums above their

This article was written by

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Contributing analyst to the iREIT+Hoya Capital investment group. The Dividend Collectuh is not a registered investment professional nor financial advisor and these articles should not be taken as financial advice. This is for educational purposes only and I encourage everyone to do their own due diligence. I'm a Navy veteran who enjoys dividend investing in quality blue-chip stocks, BDC's, and REITs. I am a buy-and-hold investor who prefers quality over quantity and plans to supplement his retirement income and live off dividends in the next 5-7 years. I aspire to reach and help the hard working, lower and middle class workers build investment portfolios of high quality, dividend-paying companies. I also hope to give investors a new perspective to help them reach financial independence.

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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