Wider spreadsheet are displayed in my article Why You Should Find Monroe Capital Corporation Attractive posted this afternoon. The spreadsheets are the first to include 2017 NII projections in the P/E ratio spreadsheet.
This article also displays stats for the full sector on 'historical earnings projection accuracy'.
Some of you may be asking 'why the articles on small caps that are so off the radar?'. I have a spreadsheet that screens out the BDCs that have low dividend growth and relatively poor NAV performance - and that data is below:
The 'buy number' is strongly aligned with my belief that valuation = dividend yield + dividend growth expectation - a risk assessment. NAV change is used for the dividend CAGR (Compound Annual Growth Rate) and portfolio weighted average yield is used as the risk assessment number.
Simplistic Yield + CAGR - RRR Formula Buy List
Lists BDCs with below 96.5% dividend to 2016 NII coverage and LTM NAV change of better than a 3.5% fall.
|Company||Yield||LTM NAV Growth||Port Wt Av Yld||Buy Number|
|Ares Capital Corporation||(NASDAQ:ARCC)||10.87||-2.14||10.4||-1.67|
|BlackRock Capital Investment||(NASDAQ:BKCC)||9.27||-3.05||11.5||-5.28|
|Fidus Investment Corporation||(NASDAQ:FDUS)||10.70||0.07||13.4||-2.63|
|Goldman Sachs BDC||(NYSE:GSBD)||9.12||-2.67||11.1||-4.64|
|Harvest Capital Credit||(NASDAQ:HCAP)||12.98||-2.26||14.0||-3.28|
|Monroe Capital Corporation||(NASDAQ:MRCC)||10.58||1.00||10.5||1.08|
|OFS Capital Corporation||(NASDAQ:OFS)||11.23||3.65||11.8||3.06|
|Saratoga Investment Corp.||(NYSE:SAR)||9.22||-0.66||12.6||-4.04|
|Medallion Financial Corp.||(TAXI)||11.52||2.33||7.5||6.35|
|TCP Capital Corp.||(NASDAQ:TCPC)||10.12||-1.53||10.9||-2.31|
|TriplePoint Venture Growth||(NYSE:TPVG)||14.31||-0.62||17.5||-3.80|
|TPG Specialty Lending||(NYSE:TSLX)||9.62||-2.45||10.5||-3.33|
The above data presents an overly simplistic analysis. On the other hand, it realistic depicts which BDCs should be an my radar.
Disclosure: I am/we are long ARCC, FDUS, MRCC, TCPC.