MAIN - SLR Investment: Continued NII Growth Expected From Q1 Earnings
2024-05-06 12:57:49 ET
Summary
- SLR Investment Corp has a high dividend yield of 10.6% and NII covered this distribution by a thin margin of 107%.
- While NII has grown in the higher rate environments, there has been a lack of dividend raise and supplementals to reward shareholders. As a result, peer BDCs look more appealing.
- Earnings are to be announced on May 8th. I expected a NII between $0.43 - $0.45 per share to be reported, considering the increased investment growth.
Overview
When investing into business development companies, I tend to focus on how sustainable the high yield is. After all, the high yield is the main appeal as I use BDCs to prioritize and add income to my portfolio. I came across SLR Investment Corp (SLRC) this past weekend and wanted to see if it met my standards. For me to consider a BDC, they have to meet the following criteria:
- Diverse portfolio of investments across different sectors.
- Strong portfolio credit quality.
- Net Investment Income must out earn the distribution by a sufficient margin on a consistent basis.
- Growing Net Asset Value.
- Transparent reporting on the good and bad.