PFLT - PennantPark Floating Rate Capital: Q2 Proves Again That It Is One Of The Best BDCs Out There
2024-05-13 08:43:43 ET
Summary
- While PFLT continues to register positive total returns, it still has failed to outperform the BDC index.
- Looking at the most recent earnings report, we can notice that all of the key metrics continue to improve, with an exception of the yield that is associated with new investments.
- Yet, the volume and quality component should offset this margin compression, just as it has done so far on a YTD basis.
- In this article, I assess Q2, 2024 earnings report and provide reasons why I still continue to remain bullish on PFLT.
In December last year, I issued a bullish thesis on PennantPark Floating Rate Capital ( PFLT ) arguing that it is one of the best risk and reward plays in the overall BDC space. The substance behind this assumption was that in the context of PFLT's double-digit dividend yield, the underlying fundamentals are very strong and arguably stronger than what could be implied by the current yield level. On top of that, the amount of external leverage is below sector average, which in combination with a nuanced focus on already cash generating and established businesses renders the investment thesis even more enticing (on a risk-adjusted basis)....
PennantPark Floating Rate Capital: Q2 Proves Again That It Is One Of The Best BDCs Out There