Fidus Investment: High Yield, Special Dividends And NAV Upside

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14.74K Followers

Summary

  • Fidus Investment covers its base dividend with net investment income and is growing net originations, supporting reliable income and portfolio growth.
  • The portfolio has shifted toward higher-quality First Lien loans, resulting in improved credit quality and a low non-accrual ratio versus peers.
  • The stock trades at a modest 5% premium to NAV, but strong fundamentals and dividend coverage suggest potential for a higher valuation multiple.
  • With a well-covered base dividend and favorable rate environment, I see an upside for FDUS and recommend a strong buy rating.

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We Are

Business development company Fidus Investment Corporation (NASDAQ:FDUS) is selling for a moderate 5% premium to net asset value while covering its base dividend with net investment income and growing its net originations.

The business development company is primarily

This article was written by

14.74K Followers
A financial researcher and avid investor with a keen eye for innovation and disruption, as well as growth buy-outs and value stocks. Keeping an eye on the pace of high tech and early growth companies, I write about current events and the biggest news surrounding the industry, and strive to provide readers with ample research and investment opportunities.

Analyst’s Disclosure:I/we have a beneficial long position in the shares of FDUS either through stock ownership, options, or other derivatives. 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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