SLRC - PennantPark Floating Rate Capital: A Solid 10.8% Yielding BDC Trading At A Discount

2024-05-26 09:00:00 ET

Summary

• PennantPark Floating Rate Capital is a BDC trading at a small discount to its NAV, making it an attractive investment in comparison to many of its peers.
• PFLT reported strong earnings with impressive revenue growth and low non-accruals in its portfolio, a testament to its portfolio quality.
• The company has a solid balance sheet and tight dividend coverage, but potential for dividend increases in the future with growth in their JV portfolio.
• PFLT has 100% of its debt investments in floating rate loans. With lower interest rates, this could lead to even tighter dividend coverage.

Introduction

In today's market, it's hard to find high-quality stocks that are trading at great valuations. This is especially true in the BDC sector; it is very hard to find deals, with many of their share prices trading at premiums above their NAVs as a result of the high interest rate environment....

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