Runway Growth Finance: 14% Dividend Yield, 30% Discount To NAV - I'm Not Buying

2025-11-19 22:12:01 ET

Runway Growth Finance ( RWAY ) offers a double-digit dividend yield at a deeply double-digit discount to net asset value ("NAV") to provide prospective shareholders with a relative margin of safety. However, the BDC's total investment portfolio is being reduced just as Fed rate cuts look to spark net investment income ("NII") downside across the BDC space. RWAY last declared a quarterly cash dividend of $0.33 per share , kept unchanged from its prior distribution, and $1.32 per share annualized for a 14.2% dividend yield. This yield has radically expanded year-to-date as the market demands a greater spread versus U.S. Treasuries to hold a security that's already seen a base dividend cut, even as near-term coverage of its base dividend looks healthy. RWAY is not alone in this conundrum, with the broader BDC space also seeing spreads significantly expand and discounts to NAV deepen. RWAY did not declare a supplemental distribution for its most recent dividend distribution, with the base distribution also lower by 7 cents from its year-ago comp....

Read the full article on Seeking Alpha

For further details see: