Solar Capital’s (NASDAQ:SLRC) Buy Rating Reaffirmed at National Securities
National Securities reaffirmed their buy rating on shares of Solar Capital Ltd. (NASDAQ:SLRC) in a research note issued to investors on Monday morning. The brokerage currently has a $24.00 target price on the financial services provider’s stock.
“• The portfolio at fair value decreased Q/Q to $1.22 billion from $1.32 billion, causing NII/share to fall $0.02/share short of the $0.40/share quarterly dividend. However, on 7/31/17 Solar announced that it had acquired National Equipment Finance (NEF) for $210 million, paying slightly above tangible book value for the company. Importantly, the acquisition adds another specialty finance vertical to SLRC’s arsenal which already has Crystal Financial for ABL (asset-based lending), two unitranche joint ventures (JV), a life sciences JV, and life sciences lending platform.
• Solar remains one of the most disciplined credit investors in the entire BDC sector. Management has had no issue with permitting the portfolio to shrink even if it means earnings come in light. We respect that Solar is not managing the company for the next 90 days, and this is reflected in the pristine asset quality and stable NAV/share. Non-accruals are still confined to one company, Direct Buy, with a cost equivalent to 0.7% of the portfolio. We continue to think SLRC should command a better valuation than it currently has given the NAV stability and earnings drivers the company has.
• We are revising out 2017 NII/share estimate to $1.63 from $1.75 and our 2018 NII/share estimate to $1.82 from $1.83. ,” National Securities’ analyst wrote.
Several other research analysts have also weighed in on the company. J P Morgan Chase & Co lowered Solar Capital from an overweight rating to a neutral rating and set a $23.00 price target on the stock. in a research report on Monday, May 1st. Zacks Investment Research lowered Solar Capital from a hold rating to a sell rating in a research report on Saturday, May 6th. BidaskClub lowered Solar Capital from a hold rating to a sell rating in a research report on Friday, July 28th. Finally, Keefe, Bruyette & Woods set a $23.00 price target on Solar Capital and gave the stock a hold rating in a research report on Thursday, August 3rd. One analyst has rated the stock with a sell rating, five have assigned a hold rating and two have issued a buy rating to the stock. Solar Capital has an average rating of Hold and a consensus price target of $22.40.
Shares of Solar Capital (NASDAQ:SLRC) traded down 0.05% during midday trading on Monday, reaching $21.98. The company’s stock had a trading volume of 36,447 shares. Solar Capital has a 12 month low of $19.26 and a 12 month high of $22.94. The company has a 50-day moving average price of $21.84 and a 200-day moving average price of $21.96.
Solar Capital (NASDAQ:SLRC) last posted its quarterly earnings results on Tuesday, August 1st. The financial services provider reported $0.38 earnings per share for the quarter, missing the Thomson Reuters’ consensus estimate of $0.41 by $0.03. The company had revenue of $33.89 million for the quarter, compared to analyst estimates of $36.51 million. Solar Capital had a return on equity of 7.30% and a net margin of 54.87%. On average, equities research analysts predict that Solar Capital will post $1.64 earnings per share for the current fiscal year.
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The firm also recently announced a quarterly dividend, which will be paid on Tuesday, October 3rd. Stockholders of record on Thursday, September 21st will be paid a dividend of $0.40 per share. The ex-dividend date is Wednesday, September 20th. This represents a $1.60 annualized dividend and a dividend yield of 7.28%. Solar Capital’s dividend payout ratio is currently 85.11%.
Several hedge funds and other institutional investors have recently modified their holdings of SLRC. Northwestern Mutual Wealth Management Co. acquired a new position in shares of Solar Capital during the first quarter valued at approximately $104,000. Global X Management Co. LLC increased its position in shares of Solar Capital by 49.7% in the first quarter. Global X Management Co. LLC now owns 6,043 shares of the financial services provider’s stock valued at $137,000 after buying an additional 2,005 shares in the last quarter. Russell Investments Group Ltd. acquired a new position in shares of Solar Capital during the second quarter valued at approximately $217,000. Alps Advisors Inc. acquired a new position in shares of Solar Capital during the second quarter valued at approximately $261,000. Finally, Mackenzie Financial Corp acquired a new position in shares of Solar Capital during the first quarter valued at approximately $273,000. Institutional investors own 62.45% of the company’s stock.
About Solar Capital
Solar Capital Ltd. is a closed-end, externally managed, non-diversified management investment company. The Company’s investment objective is to generate both current income and capital appreciation through debt and equity investments. It invests in privately held the United States middle market companies.
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