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Q1-18 Numbers Say MAIN Is Consistently Superior

|About: Main Street Capital (MAIN)

The  Main Street Capital (MAIN) projections from Yahoo Finance:

Earnings Estimate Current Qtr. (Mar 2018) Next Qtr. (Jun 2018) Current Year (2018) Next Year (2019)
No. of Analysts 5 5 5 5
Avg. Estimate 0.59 0.61 2.46 2.56
Low Estimate 0.59 0.59 2.37 2.36
High Estimate 0.60 0.62 2.55 2.73
Year Ago EPS 0.57 0.58 2.39 2.46

My spreadsheets:

Q1-18 Q4-17 Q3-17 Q2-17 Q1-17 Q4-16 Q3-16 Q2-16 Q1-16 Q4-15 Q3-15 Q2-15 Q1-15 Q4-14 Q3-14 Q2-14 Q1-14 Q4-13 Q3-13 Q2-13 Q1-13
Realized & Unrealized Gains -3.437 23.957 5.441 12.310 5.922 21.311 12.096 5.036 -12.615 -22.659 -10.430 10.125 11.642 -6.452 -0.356 10.147 8.160 -5.008 11.052 6.954 8.397
Realized & Unrealized Gains/share -$0.0584 $0.4107 $0.0953 $0.2192 $0.1074 $0.3985 $0.2299 $0.0979 -$0.2496 -$0.4511 -$0.2084 $0.2030 $0.2526 - $0.1434 - $0.0079 $0.2295 $0.2045 - $0.1259 $0.2975 $0.1998 $0.2420

Main Street Capital Q1-18 Q4-17 Q3-17 Q2-17 Q1-17 Q4-16 Q3-16 Q2-16 Q1-16 Q4-15 Q3-15 Q2-15 Q1-15 Q4-14 Q3-14 Q2-14 Q1-14 Q4-13
Interest income 39.612 44.594 39.814 39.065 38.463 37.508 35.580 33.419 32.182 34.322 34.167 32.777 30.067 29.030 27.669 27.929 25.734
Dividend income 13.831 9.506 10.088 8.128 6.982 7.088 9.730 7.735 7.629 6.913 6.939 5.278 5.136 6.824 5.935 5.432 4.044
Fee income 2.499 1.697 1.844 3.078 2.444 2.235 1.284 1.711 2.064 2.118 1.273 3.011 1.602 2.638 2.627 1.286 0.791
Total investment income 55.942 55.797 51.786 50.271 47.889 46.830 46.594 42.865 41.875 43.353 42.379 41.066 36.805 38.757 36.231 34.647 30.569 33.393
TII - fee (calc of PWAY) 53.443 54.100 49.942 47.193 45.445 44.596 45.310 41.154 39.811 41.235 41.106 38.055 35.203 35.854 33.604 33.361 29.778
Adjusted PWAY number 9.23% 9.97% 9.21% 9.09% 9.19% 8.93% 9.44% 8.72% 8.75% 9.16% 8.81% 8.50% 8.06% 9.12% 8.98% 9.31% 9.02%

Main Street Capital Q1-18 Q4-17 Q3-17 Q2-17 Q1-17 Q4-16 Q3-16 Q2-16 Q1-16 Q4-15 Q3-15 Q2-15 Q1-15 Q4-14 Q3-14 Q2-14 Q1-14 Q4-13
Total investment income 55.942 55.797 51.786 50.271 47.889 46.830 46.599 42.902 42.006 43.353 42.379 41.308 37.179 38.757 36.351 34.877 30.776 33.393
Net investment income 36.975 37.483 34.029 32.693 31.166 30.432 30.557 27.648 27.164 28.520 27.861 27.201 23.491 26.329 24.877 23.578 20.739 22.831
Investments @ fair value 2.314 2.171 2.170 2.077 1.979 1.997 1.920 1.888 1.819 1.800 1.867 1.790 1.747 1.572 1.497 1.433 1.320 1.299
Wt Av Share Count 58.852 58.327 57.109 56.167 55.125 53.473 52.613 51.441 50.550 50.229 50.037 49.883 46.080 44.992 44.911 44.217 39.899 39.762
TII/share $0.9506 $0.9566 $0.9068 $0.8950 $0.8687 $0.8758 $0.8857 $0.8340 $0.8318 $0.8631 $0.8470 $0.8281 $0.8068 $0.8614 $0.8094 $0.7888 $0.7713 $0.8398
NII/share $0.6283 $0.6426 $0.5959 $0.5821 $0.5654 $0.5691 $0.5808 $0.5375 $0.5374 $0.5678 0.5568 $0.5453 $0.5098 $0.5852 $0.5539 $0.5332 $0.5198 $0.5742
NAV/share $23.67 $23.53 $23.02 $22.62 $22.44 $22.10 $21.62 $21.11 $21.18 $21.24 $21.79 $21.84 $21.87 $20.85 $21.08 $21.03 $20.14 $19.89
Wt Av Yield - LMM 12.1% 12.0% 11.9% 12.0% 12.2% 12.5% 12.5% 12.4% 12.4% 12.2% 12.3% 12.8% 13.1% 13.2% 13.5% 14.9% 15.1% 14.7%
Wt Av Yield - MM 9.2% 9.0% 8.7% 8.8% 8.6% 8.5% 8.4% 8.4% 8.1% 8.0% 8.0% 7.9% 7.9% 7.8% 7.5% 7.5% 7.6% 7.8%
Wt Av Yield - Private 9.4% 9.2% 9.3% 9.5% 9.6% 9.6% 9.6% 9.7% 9.6% 9.5% 9.5% 9.8% 9.9% 10.1% 10.4% 11.3% 11.1% 11.3%
Yield - 4 times TII/Inv 9.67% 10.28% 9.55% 9.68% 9.68% 9.38% 9.71% 9.09% 9.23% 9.66% 9.08% 9.23% 8.51% 9.86% 9.71% 9.74% 9.33% 10.28%
PIK/TII Ratio 1 4 1.9% 3.0% 3.4% 4.0% 4.1% 3.1% 3.7% 1.8% 2.2% 2.5% 4.0% 5.4%
Non-accruals @ cost 3.3% 2.3% 2.7% 2.6% 2.7% 3.0% 2.8% 3.7% 3.7% 0.4% 0.2% 0.3% 1.2% 1.7% 1.2% 1.2% 2.0% 2.3%
Non-accruals @ fair value 0.8% 0.2% 0.4% 0.2% 0.2% 0.6% 0.4% 0.5% 0.5% 3.7% 3.0% 3.1% 3.9% 4.7% 3.9% 3.5% 4.6% 4.7%
Energy Equip + Fuel @ cost 1 6.9% 6.9% 9.2% 8.7% 10.0% 9.4% 11.4% 13.9%
Energy Equip + Fuel @ fair 1 6.2% 5.7% 7.5% 6.9% 7.6% 7.2% 10.7% 13.1%

Main Street Capital Q1-18 Q4-17 Q3-17 Q2-17 Q1-17 Q4-16 Q3-16 Q2-16 Q1-16 Q4-15 Q3-15 Q2-15 Q1-15 Q4-14 Q3-14 Q2-14 Q1-14
Debt 770.076 797.171 886.761 820.822 793.010 848.258 809.135 839.334 795.461 780.398 835.344 511.963 653.284 706.604 600.511 557.761 539.921
Debt/share 13.0850 13.6673 15.5275 14.6139 14.3857 15.8633 15.3790 16.3164 15.7361 15.5368 16.6945 10.2633 14.1772 15.7334 13.3771 12.6142 13.5352
Debt/share to NAV 55.28% 58.08% 67.45% 64.61% 64.11% 78.78% 71.13% 77.29% 74.30% 73.15% 76.62% 46.99% 64.82% 75.46% 63.43% 59.98% 67.21%
Interest expense 10.265 9.659 9.420 8.793 8.608 8.619 8.573 8.255 8.182 8.360 8.302 7.657 7.796 6.876 5.954 5.473 5.286
Interest expense/share 0.1744 0.1656 0.1649 0.1565 0.1561 0.1612 0.1629 0.1605 0.1619 0.1664 0.1659 0.1535 0.1692 0.1528 0.1326 0.1238 0.1325
Interest expense/TII 18.35% 17.31% 18.19% 17.49% 17.97% 18.40% 18.40% 19.24% 19.48% 19.28% 19.59% 20.59% 20.97% 17.74% 16.38% 15.69% 17.17%
Annualized Int exp/Debt 5.33% 4.85% 4.25% 4.28% 4.34% 4.06% 4.24% 3.93% 4.11% 4.28% 3.98% 5.98% 4.77% 3.89% 3.97% 3.92% 3.92%
PWAY - Int exp/Debt 390 bps 512 bps 496 bps 481 bps 485 bps 532 bps 547 bps 516 bps 512 bps 538 bps 510 bps 325 bps 374 bps 597 bps 574 bps 582 bps 541 bps

MAIN has yet to report their 10-Q - thus I am still missing some numbers. Missing data will show up in their 'cells' with a number that matches the quarter's number.

My summation:

Given the trend in NII - this quarter's analyst consensus projection was a low-ball number. But NII was a beat and NAV grew. Their were 5 analyst covering MAIN this quarter. There were 8 analyst covering MAIN back in Q4-16. That could be an indication that MAIN is 'on the radar' for a lower percentage of investors due to that decreased coverage.

NAV grew despite there being negative "realized and unrealized gains". That does not happen with other BDCs. Why? There are many investors who DRIP their shares. (We should thank them.) Thus each quarter their investors buy new shares above NAV -- which in turn raises the NAV.

I own it. I am happy. Still - there is some bad news. Non-accruals are up. The "PWAY minus annual interest expense ratio (the BDC equivalent of a 'net interest margin') is down -- with the cost of debt being up and the PWAY down. MAIN's energy exposure is relatively high.

Never get complacent. Always watch the quarterly numbers like a hawk. There is a "dividend CAGR (compound annual growth rate) + yield + special dividends" justification for MAIN's high Price/NAV. That has been "baked into the cake" quarter after quarter.  But . . . . that could one day change.

Disclosure: I am/we are long MAIN.