XLF - BlackRock TCP Capital: Q1 Results Show Increased Profitability
2024-05-07 02:06:52 ET
Summary
- BlackRock TCP Capital Corp underperforms peer BDCs in total return despite having a higher dividend yield of 13.2%.
- TCPC's portfolio is highly diversified, with a focus on the financial services industry.
- The fund's NII has grown due to the higher interest rate environment, and its dividend is well-covered, but there are concerns about its ability to maintain the distribution in a changing economic environment.
- The current non-accrual rate remains higher than peers at 3.6%.
- TCPC may be attractively priced, though, as it currently sits at a higher discount to NAV than average.
Overview
BlackRock TCP Capital Corp ( TCPC ) is a business development company that operates as a subsidiary of BlackRock ( BLK ). This BDC's main objective is a deliver total returns through the combination of high income and capital appreciation when possible. TCPC invests in middle market companies by taking on senior debt and providing financing solutions to companies seeking a source of capital. Since this BDC operates as a subsidiary of BlackRock, one's first assumption would be that it offers superior quality. Well, over the course of this article I will attempt to lay that out and determine if that is the case....
BlackRock TCP Capital: Q1 Results Show Increased Profitability