TCPC - BlackRock TCP Capital: This 12% Yielding BDC Is Likely Fairly Valued
2024-06-09 23:27:24 ET
Summary
- BlackRock TCP Capital completed the acquisition of BlackRock Capital Investment in Q1'24, creating a larger and more diversified BDC focused on first liens.
- The company's solid Q1 earnings pushed shares into a new up-leg, but TCPC has a high non-accrual percentage and is overly invested in variable rate loans.
- BlackRock TCP Capital has a solid distribution coverage ratio and is trading above net asset value.
- Since a major revaluation has already taking place, I believe a hold rating makes the most sense for TCPC.
BlackRock TCP Capital ( TCPC ) completed the acquisition of BlackRock Capital Investment in the first-quarter, which has generated a larger, more diversified BDC that is now running a distinct first lien strategy. The company's shares traded well below book value before the merger, and its strong Q1'24 earnings (especially with regard to distribution coverage) pushed shares of TCPC into a new up-leg. Considering that shares have seen a rather significant revaluation to the upside after first-quarter earnings, I believe BlackRock TCP Capital has limited upside potential in FY 2024....
BlackRock TCP Capital: This 12% Yielding BDC Is Likely Fairly Valued