WHF - WhiteHorse Finance: Well-Covered Dividend But Lacks NAV Growth
2024-05-21 20:11:06 ET
Summary
- WhiteHorse Finance is a business development company that focuses on making investments in lower middle market companies.
- The company's portfolio is highly diverse and primarily consists of first lien senior secured debt, mitigating repayment risk.
- While WhiteHorse Finance offers a high dividend yield over 11% but the lack of growth in net asset value raises concerns about its overall performance.
- Non-accruals sit at 3% of cost, which remains above BDC peers of higher quality.
- The high interest rate environment has helped rake in more net investment income, but it seems to be putting a strain on some portfolio companies.
Overview
Business development companies have been a great way hedge against the high interest rate environment that we've been in for the past two years. This is because BDCs typically invest in debt capital that has a focus on floating rates. This means that as interest rates rise, so does the interest they can pull in from the capital they lend. WhiteHorse Finance ( WHF ) is an externally managed business development company that focuses on making investments to lower middle market companies. WHF follows a disciplined underwriting approach so that they can find quality investments that generate the highest returns....
WhiteHorse Finance: Well-Covered Dividend But Lacks NAV Growth