roberthyrons/iStock via Getty Images
Overview
BlackRock TCP Capital Corp (NASDAQ:TCPC) continues to be one of the worst performing Business Development Companies in the sector. The last time that I covered TCPC, I issued a sell rating due to
BlackRock TCP Capital: The Bleeding Hasn't Stopped Yet
Summary
- TCPC remains a sell due to ongoing NAV decline, weak earnings, and lack of meaningful new investment activity despite some portfolio improvements.
- While the 14% dividend yield is well-covered and distributions are likely safe, long-term capital destruction outweighs the income appeal.
- Non-accruals have improved and management reduced expenses and debt, but persistent headwinds from high interest rates limit upside potential.
- TCPC trades at a larger discount to NAV, but without catalysts for growth or portfolio expansion, I see no compelling reason to buy.
Financial analyst by day and a seasoned investor by passion, I've been involved in the world of investing for over 15 years and honed my skills in analyzing lucrative opportunities within the market.I specialize in uncovering high quality dividend stocks and other assets that offer potential for long term-growth that pack a serious punch for bill-paying potential. I use myself as an example that with a solid base of classic dividend growth stocks, sprinkling in some Business Development Companies, REITs, and Closed End Funds can be a highly efficient way to boost your investment income while still capturing a total return that follows traditional index funds. I create a hybrid system between growth and income and manage to still capture a total return that is on par with the S&P.
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.