TRIN - Trinity Capital: Record Q4 2023 Earnings 13% Dividend Yield

2024-03-08 09:15:00 ET

Summary

• Business development companies like Trinity Capital have benefited from the Fed's rising interest rate push.
• Trinity Capital's earnings have increased due to its high percentage of floating rate investments.
• TRIN's portfolio has seen an increase in yield, and its management estimates that it earns an additional $0.15 per share for every 100 basis point interest rate rise.

While the Fed's rate rising program has pressured earnings at many companies, it has greatly benefited business development companies, such as Trinity Capital ( TRIN ).

The key here is that most BDCs have a high percent of floating rate investments, while their borrowings have a much smaller amount of floating rates. In TRIN's case, the split was 69% floating rate investments vs. 33% floating rate debt, as of 12/31/23....

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