MAIN - Trinity Capital: Trades At Smaller Premium Than Peers

2024-06-03 12:29:58 ET

Summary

• Trinity Capital is an internally-managed business development company that provides debt and equipment financing to growth stage middle market companies.
• TRIN has a current dividend yield of 13.7%, making it an appealing investment for income-focused investors.
• TRIN's strategy focuses on maintaining a majority exposure to floating rate debt investments, which has been beneficial in the current higher interest rate environment.
• The credit quality of debt investments have improved substantially with a higher rate of debt investments reaching the highest quality level rating.
• The price trades at a premium to NAV but this is typical for high performing, internally managed BDCs. TRIN trades at a much lower premium than internally managed peers.

Overview

Trinity Capital Inc. ( TRIN ) is an internally managed business development company that provides debt and equipment financing to middle-market growth-stage companies. As a business development company, their main objective is to generate consistent income while providing slight capital appreciation through the growth of their debt and equity investments. I previously covered TRIN and rated it a buy at the beginning of March. Since then, the total return has been on par with the S&P 500's performance. Over the last year, however, TRIN has outperformed due to the high levels of cash flow generated and the high distribution yield....

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