SLRC - SLR Investment: Trading Below NAV With A 10.4% Dividend Yield But I'm On The Sidelines
2024-03-08 11:11:26 ET
Summary
- SLRC saw its net asset value per share grow by 3 cents sequentially during its fiscal 2023 fourth quarter.
- The BDC is currently trading at a rare double-digit 12.88% discount to NAV per share.
- NII coverage on the dividend at 107% could come under pressure on the back of base interest rate cuts later this year even with the 2023 ramp in originations.
When I last covered SLR Investment ( SLRC ) last year, I flagged net asset value challenges as reasons to remain on the sidelines. This had essentially been dipping every quarter since the summer of 2021 to sap confidence in the safety of a principal investment in the ticker against its double-digit dividend yield. SLRC last declared a quarterly cash dividend of $0.41 per share , kept unchanged sequentially and $1.64 per share annualized for a 10.4% dividend yield. The business development company's NAV per share at $18.09 as of the end of its fiscal 2023 fourth quarter was up $0.03 sequentially with no new non-accruals during the quarter. Hence, with the commons currently at $15.76 per share, they're trading for a 12.88% discount to NAV or 87 cents on the dollar....
SLR Investment: Trading Below NAV With A 10.4% Dividend Yield But I'm On The Sidelines