Solar Capital (NASDAQ: SLRC) recently received a number of ratings updates from brokerages and research firms:

  • 11/17/2018 – Solar Capital was upgraded by analysts at Zacks Investment Research from a “sell” rating to a “hold” rating. According to Zacks, “Solar Capital Ltd. is a closed-end investment company that invests primarily in leveraged companies, including middle market companies, in the form of senior secured loans, mezzanine loans, and equity securities. “
  • 11/13/2018 – Solar Capital was upgraded by analysts at BidaskClub from a “hold” rating to a “buy” rating.
  • 11/6/2018 – Solar Capital had its “buy” rating reaffirmed by analysts at National Securities. They now have a $25.00 price target on the stock. They wrote, “ Solar posted $0.44/share of NII for 3Q18, above the $0.41/share quarterly dividend but short of our $0.46/share estimate.

     The portfolio at fair value was up modestly on the quarter to $1.41 billion from $1.40 billion Q/Q. The company has been and we expect will likely continue to be one of the most disciplined underwriters in the BDC sector.

     As previously discussed, Solar brought its SSLP and SSLP II joint venture programs on balance sheet, adding $226.5 million of senior secured loans to its balance sheet. The company also brought both revolvers pertaining to the SSLPs on its books.

     We think this makes sense as it reduces frictional costs and greatly frees up the 30% basket for Solar. This will enable the company to make more strategic lender finance acquisitions going forward.

     The company already has four distinct verticals: cash flow middle market lending ABL (asset-based lending), equipment finance, and life sciences lending. We think the company could potentially add another two verticals, although the timing of this is unknown. Solar had spoken with Crystal Financial two years before acquiring the company and had discussions with NEF four years prior to acquiring them.

     The company also discussed the expansion of the platform, with Solar Capital Partners now having over $5.5 billion of AUM. We think the increased size and scale of the platform combined with uncorrelated verticals bodes well for SLRC’s earnings going forward.

     We are revising our 2018 NII/share estimate to $1.79 from $1.82 and our 2019 NII/share estimate to $1.93 from $1.95 and maintaining our BUY rating and $25 price target.”
  • 11/1/2018 – Solar Capital was downgraded by analysts at Zacks Investment Research from a “hold” rating to a “sell” rating. According to Zacks, “Solar Capital Ltd. is a closed-end investment company that invests primarily in leveraged companies, including middle market companies, in the form of senior secured loans, mezzanine loans, and equity securities. “
  • 10/10/2018 – Solar Capital was downgraded by analysts at Zacks Investment Research from a “hold” rating to a “sell” rating. According to Zacks, “Solar Capital Ltd. is a closed-end investment company that invests primarily in leveraged companies, including middle market companies, in the form of senior secured loans, mezzanine loans, and equity securities. “
  • 10/8/2018 – Solar Capital was downgraded by analysts at ValuEngine from a “hold” rating to a “sell” rating.
  • 10/4/2018 – Solar Capital was downgraded by analysts at Wells Fargo & Co from an “outperform” rating to a “market perform” rating.

Shares of Solar Capital stock traded up $0.09 during trading on Monday, reaching $20.95. The company’s stock had a trading volume of 35,552 shares, compared to its average volume of 90,626. The stock has a market cap of $881.56 million, a PE ratio of 12.93, a PEG ratio of 2.35 and a beta of 0.65. Solar Capital Ltd. has a 52 week low of $19.70 and a 52 week high of $22.37. The company has a debt-to-equity ratio of 0.52, a quick ratio of 1.01 and a current ratio of 1.01.

Solar Capital (NASDAQ:SLRC) last announced its earnings results on Monday, November 5th. The financial services provider reported $0.42 earnings per share (EPS) for the quarter, missing the Zacks’ consensus estimate of $0.45 by ($0.03). Solar Capital had a net margin of 48.83% and a return on equity of 8.12%. The business had revenue of $37.01 million during the quarter, compared to the consensus estimate of $39.59 million. Equities research analysts predict that Solar Capital Ltd. will post 1.78 earnings per share for the current fiscal year.

The company also recently disclosed a quarterly dividend, which will be paid on Friday, January 4th. Investors of record on Thursday, December 20th will be given a dividend of $0.41 per share. The ex-dividend date of this dividend is Wednesday, December 19th. This represents a $1.64 annualized dividend and a yield of 7.83%. Solar Capital’s dividend payout ratio is 101.23%.

Institutional investors and hedge funds have recently bought and sold shares of the stock. FDx Advisors Inc. bought a new stake in Solar Capital during the second quarter worth about $207,000. Mirae Asset Global Investments Co. Ltd. bought a new stake in Solar Capital during the third quarter worth about $274,000. Texas Yale Capital Corp. bought a new stake in Solar Capital during the second quarter worth about $276,000. California Public Employees Retirement System bought a new stake in Solar Capital during the second quarter worth about $356,000. Finally, Royal Bank of Canada lifted its position in Solar Capital by 78.4% during the first quarter. Royal Bank of Canada now owns 91,323 shares of the financial services provider’s stock worth $1,855,000 after purchasing an additional 40,143 shares during the period. 58.99% of the stock is owned by institutional investors and hedge funds.

Solar Capital Ltd. is a business development company specializing in secured debt (first lien unitranche and second lien), subordinated (unsecured) debt, minority equity, and strategic income-oriented control equity investments in leveraged middle market companies. The fund invests in aerospace and defense; air freight & logistics; asset management; automotive; banking; beverage, food and tobacco; building products; buildings and real estate; broadcasting and entertainment; cargo transport; commercial services and supplies; communications equipment; chemicals, plastics and rubber; containers, packaging and glass; construction & engineering; diversified/conglomerate manufacturing; consumer Finance; distributors; diversified/conglomerate services; diversified financial services; diversified real estate sctivities; food products; Footwear; Education Services; diversified telecommunications services; electronics; farming and agriculture; finance; grocery; health care equipment and supplies; health care facilities; education and childcare; home and office furnishing, durable consumer products; hotels, motels, inns and gaming; insurance; restaurants, leisure, amusement, and entertainment; leisure equipment tolls and services, media, multiline retail, multi sector holdings; paper and forest products; personal products; professional services, research and consulting services, software; specialty retail; textiles apparel and luxury goods, thrifts and mortgage finance, trading companies and distributors, utilities, and wireless telecommunication services; industrial conglomerates; internet software and services, IT services, machinery; mining, steel, iron, and non precious metals; oil and gas; personal, food and miscellaneous services; printing and publishing; retail stores; telecommunications; textiles and leather; and utilities.

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