TPVG - TriplePoint Venture Growth: Should You Be Worried About The Dividend In 2024?

2024-03-10 23:42:34 ET

Summary

• TriplePoint Venture Growth suffers from high non-accruals in its credit portfolio. The firm's NAV dropped 11% Q/Q to $9.21 per share in Q4 due to realized investment losses.
• The BDC's non-accrual percentage dropped to 4% in Q4 '23.
• TPVG had a 118% NII/dividend ratio in Q4 '23, and 129% in FY 2023. The dividend, for now, appears reasonably well-protected.
• The shares have revalued 12% lower after earnings, and investors shouldn't expect much in terms of valuation growth.

TriplePoint Venture Growth ( TPVG ) missed net investment income expectations only by $0.01 per share for the fourth-quarter, and the BDC's Q4 '23 NII was sufficient to support the $0.40 per share dividend. The BDC's shares slumped 12%, however, as the BDC also reported a large amount of realized investment losses and an 11% drop in its net asset value, causing new concerns about the dividend. Since the investment company reported high net investment income relative to its dividend, I believe the market is overreacting to the earnings release. However, I recognize that shares have more risk than shares of other BDCs, like Ares Capital ( ARCC )....

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