TCRD Reports NII of $0.3628/share compared to a Dividend of $0.34/quarter
What They Earned THL Credit reported for Q4-15 Total Investment Income of $23.565 million ($0.7070/share). Net Investment Income was $12.079 million ($0.3628/share). The NII/TII ratio was 51.3%. The Net Increase in Net Assets Resulting from Operations was - $3.998 million [- $0.11990/share]. TCRD had net realized and unrealized losses on portfolio investments of $8 million during Q4-15. TCRD's net asset value per share was $12.58 compared to $13.03 at the end of Q3-15.
Stats from Yahoo Finance earnings history
|Earnings History||Mar 15||Jun 15||Sep 15||Dec 15|
News from AP: TCRD "posted revenue of $23.6 million in the period, also beating Street forecasts. Four analysts surveyed by Zacks expected $23.2 million."
My TCRD spreadsheets
|Realized & Unrealized Gains||-16.077||- 9.055||2.125||3.652||-7.663||-0.272||-3.424||-0.609||x||-3.531||2.101||1.699|
|Realized & Unrealized Gains/share||-0.4823||-0.2702||0.0629||0.1077||-0.2260||-0.0080||-0.0841||-0.0180||x||-0.1041||0.0781||0.0646|
|Total investment income||23.565||23.117||23.751||23.762||24.100||23.145||23.745||20.895||18.500|
|Net investment income||12.079||11.649||11.934||11.910||12.400||12.223||12.887||10.981||9.100|
|Investments @ fair value||0.754||0.748||0.792||0.748||0.784||0.718||0.742||0.739||0.649|
|Wt Av Share Count||33.333||33.507||33.810||33.905||33.905||33.905||33.905||33.905||33.905|
|Wt Av Yield||11.2%||11.7%||11.8%||11.7%||11.7%||11.3%||11.1%||11.0%||11.7%|
|In Q2-15 TCRD repurchased $3.8 million of common stock at an average price of $12.38 - approx. 307 thousand shares|
Summary: (1) TCRD had negative portfolio changes in 7 out of the last 11 quarters where I have the data. That performance is around sector average. (2) TCRD had anemic dividend coverage in this - and in most quarters. That is around sector average. (3) TCRD has a very good record when it comes to NII consistency - but (4) there is no growth trend in the numbers. (5) Non-accrual loans jumped to 3.3% of the portfolio at cost from 0.6% in the prior quarter. TCRD had a higher percentage in Q1 and Q2 of 2014 - and worked through that problem with only minor decrements to NAV. (Saving the most important to last) (6) Energy/utility loans were 9.96% of the TCRD portfolio - which is much higher than sector average.
As of 3-04-16, TCRD sold at a price that resulted in an 80% (right at sector average) price to NAV ratio. TCRD sold at slightly above the sector average yield. Historical performance indicates that TCRD should sell at slightly above sector average on valuation metrics. But the high energy exposure strongly indicates that TCRD should sell well below sector average valuations.
Given the high energy weighting, the non-accrual percentage looks on the "too good to be true" side of things. It would be overly cautious to call all energy loans "trash". But in this environment, I would suggest that most investors should want to err on the side of being overly cautious. Buy the baby bonds (TCRX and TCRZ) and avoid the equity. Current valuations do not reflect the potential risk that is in TCRD.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.