CION - CION Investment Corp: Big Discount Strong Yield

2024-07-01 12:13:49 ET

Summary

• CION Investment Corp. is a debt-focused BDC with $2 billion in assets invested primarily in first-lien floating rate debt.
• CION trades at a significant discount relative to peers, offering a strong dividend yield of nearly 12% with high coverage.
• CION has had past challenges, but they appear to be on the mend, and dividend coverage here is strong.

Written by Nick Ackerman.

CION Investment Corp. ( CION ) is a debt-focused business development company ("BDC"). They primarily focus on floating rate senior secured debt investments. They are invested across 109 portfolio companies and manage $2 billion in total assets. While they are a debt-focused BDC, it still leaves a sleeve open for some equity investments as well. They are also externally managed, which investors generally view as a negative as there can be some conflicts of interest.

CION trades at a massive discount relative to its peers and on an absolute basis. This seems to be related to going through a rather 'rough patch' in 2023. It also delivers a strong dividend yield of nearly 12% based on the regular quarterly dividend. Being in a position to pay some supplemental helps to juice the actual yield a bit further....

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