TRIN - Trinity Capital: A 13%+ Yielder With Excellent Portfolio Management

2024-06-10 16:19:50 ET

Summary

• Trinity Capital is a well-managed BDC with a dividend yield of over 13%.
• There has been a slight increase in the portion of the portfolio on the watch list, indicating potential default risks.
• However, the overall portfolio quality remains good, and the BDC has continued to grow its NII and dividend.

Trinity Capital ( TRIN ) is a well-managed BDC with an attractive dividend yield of more than 13%. However, in recent quarters, I have increasingly been concerned about the risk of deteriorating portfolio quality at TRIN and other BDCs. As of my last analysis during the run-up to the fourth quarter of 2023 earnings report, there was a marked increase in the portion of the portfolio placed on the watch list at TRIN—a sign that these investments might be inching closer to default. Specifically, the watch list expanded from 3.6% of the total portfolio in Q4 2023 to 5.1% by Q1 2024....

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