Oppenheimer analyst Chris Kotowski maintained a Buy rating on Stellus Capital (SCM) yesterday and set a price target of $15. The company’s shares closed yesterday at $13.07.
Kotowski said:
“SCM reported adjusted net investment income (NII) per share of $0.39 versus our estimate of $0.34 and consensus’ $0.35E, comfortably covering the $0.34 dividend. They finally cover the dividend after falling short in the past quarters. That’s a welcome change and we expect this to continue. But that’s the bedrock of BDC investing, one would look beyond the noise of a quarter or two and invest in BDCs based on long- term strategy. A year ago SCM’s first lien debt composed 35% of the portfolio, its strategy to shift to more secured yet lower yield first lien debt pays off nicely; at the end of 3Q18 first lien percentage was 54% and the portfolio has demonstrated a stable and growing earnings power since then.”
According to TipRanks.com, Kotowski is a 5-star analyst with an average return of 9.4% and a 59.5% success rate. Kotowski covers the Financial sector, focusing on stocks such as Eagle Point Credit Company Inc, Great Elm Capital Corporation, and Fidus Investment Corporation.
Currently, the analyst consensus on Stellus Capital is a Moderate Buy with an average price target of $15.
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Stellus Capital’s market cap is currently $198.9M and has a P/E ratio of 8.12. The company has a Price to Book ratio of 0.93.
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Stellus Capital Investment Corp. is an an externally managed, closed-end, non-diversified management investment company that has elected to be regulated as a business development company. It develops company which seeks investment opportunities in middle market companies located in The US and Canada.
