HTGC - Trinity Capital: Premium To Nav Has Come Down (Rating Upgrade)
2024-03-07 08:35:00 ET
Summary
- I am upgrading my rating to a Buy on Trinity Capital stock due to their net investment income growth and the price trading at a lower premium to NAV.
- Trinity Capital reported growth in loan originations and net investment income which will help support the current dividend yield of 13.9%.
- Trinity Capital's risk profile is well-suited to ride out rate cuts or market cycles due to their portfolio of floating rate loans.
- The average credit ratings of their debt investments does leave some room for improvement desired and could be a vulnerability during a recession.
Overview
The last time I took a look at Trinity Capital Inc. ( TRIN ), I decided to stay on the sidelines and rated the stock a Hold . This was due to the fact that the price traded at a higher premium to NAV (net asset value) than what it averaged over the last 3-year period. However, after reassessing some similar BDCs (business development companies) and seeing that they all trade at premiums significantly higher than TRIN does, I feel comfortable starting a position here....
Trinity Capital: Premium To Nav Has Come Down (Rating Upgrade)