TPVG - TriplePoint Venture Growth: Increased Probability Of A Dividend Cut (Downgrade)

2024-04-11 10:15:00 ET

Summary

• TriplePoint Venture Growth faces challenges with the quality of its portfolio companies, a decrease in NAV, and growing gross leverage rate.
• The dividend coverage rate is less comfortable, and the total fair value and number of portfolio companies have significantly decreased.
• Despite a high dividend yield, TPVG has underperformed its BDC peers in total return, leading to a downgrade in rating to a Sell.

Overview

Back in December of last year, I published an article titled: ' TriplePoint Venture Growth: High Yield Is Sustainable For Now ' . My prior thesis was that the dividend remained covered so I planned to hold on to my shares and continue collecting until the next earnings date. The prior Net Investment Income [NII] reported last quarter was $0.54 per share, which could comfortably cover the dividend distribution of $0.40 per share. Now that Q4 earnings have been reported, I see more of a threat to the sustainability and health of the overall quality of their portfolio. As a result, this may have an effect on the dividend so I am jumping ship here and allocating my funds elsewhere....

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