MidCap Financial Investment (NASDAQ:MFIC) Releases Quarterly Earnings Results, Beats Expectations By $0.03 EPS

MidCap Financial Investment (NASDAQ:MFIC) issued its quarterly earnings results on Thursday. The company reported $0.40 earnings per share for the quarter, topping the consensus estimate of $0.37 by $0.03, Zacks reports. MidCap Financial Investment had a positive return on equity of 11.17% and a negative net margin of 9.85%.The firm had revenue of ($9.12) million for the quarter, compared to the consensus estimate of $67.80 million.

Here are the key takeaways from MidCap Financial Investment’s conference call:

• NAV per share fell 3.2% to $13.37, reflecting a $50.3 million portfolio loss, or $0.61 per share, concentrated in five investments. GAAP net loss was $0.21 per share, although net investment income of $0.40 per share exceeded the dividend.
• Credit pressure increased as borrower net leverage rose to 5.36x from 5.29x, with $77.6 million of investments on non-accrual status, or 2.8% of the portfolio at fair value. ChyronHego was the largest loss contributor after a $60 million debt-for-equity exchange and a decline in the value of its preferred equity.
• Management is prioritizing deleveraging over new investments and additional buybacks, targeting net leverage in the low 1.4x range versus 1.54x at quarter-end. The company reported $160 million of net repayments and repurchased $31.9 million of shares below NAV during the quarter.
• New commitments were only $5.8 million, while total investment income declined to $68.2 million as the portfolio contracted. Refinancing $125 million of matured notes with the revolving facility is also expected to modestly increase borrowing costs.
• Management said liquidity remains sound, with $800 million of adjusted undrawn revolver capacity, and expects additional Merx paydowns from aircraft and engine sales. However, future deployment will depend on successful deleveraging and whether market conditions make new opportunities sufficiently attractive.

MidCap Financial Investment Stock Up 0.5%

Shares of MFIC stock traded up $0.05 on Friday, hitting $9.76. The stock had a trading volume of 2,009,972 shares, compared to its average volume of 491,803. The company has a quick ratio of 4.42, a current ratio of 3.78 and a debt-to-equity ratio of 1.58. The business has a 50 day moving average price of $9.95 and a 200 day moving average price of $10.71. The company has a market cap of $803.93 million, a PE ratio of -27.11 and a beta of 0.61. MidCap Financial Investment has a one year low of $9.28 and a one year high of $13.34.

MidCap Financial Investment Dividend Announcement

The company also recently declared a quarterly dividend, which will be paid on Thursday, September 24th. Stockholders of record on Tuesday, September 8th will be paid a dividend of $0.31 per share. The ex-dividend date is Tuesday, September 8th. This represents a $1.24 annualized dividend and a dividend yield of 12.7%. MidCap Financial Investment’s dividend payout ratio (DPR) is currently 3,100.00%.

Analyst Ratings Changes

A number of research firms have recently commented on MFIC. Weiss Ratings cut shares of MidCap Financial Investment from a “hold (c)” rating to a “hold (c-)” rating in a report on Monday, May 18th. Truist Financial dropped their target price on shares of MidCap Financial Investment from $13.00 to $12.00 and set a “buy” rating on the stock in a research note on Friday. Wall Street Zen raised shares of MidCap Financial Investment from a “sell” rating to a “hold” rating in a research report on Saturday, April 25th. Finally, JPMorgan Chase & Co. reduced their target price on shares of MidCap Financial Investment from $10.00 to $9.50 and set a “neutral” rating on the stock in a research report on Thursday, July 2nd. Two research analysts have rated the stock with a Buy rating and seven have given a Hold rating to the company’s stock. According to MarketBeat, the company currently has an average rating of “Hold” and an average target price of $11.32.

Institutional Inflows and Outflows

Several hedge funds and other institutional investors have recently added to or reduced their stakes in MFIC. Caxton Associates LLP bought a new stake in shares of MidCap Financial Investment in the 1st quarter valued at about $166,000. Quantbot Technologies LP bought a new position in shares of MidCap Financial Investment during the second quarter valued at approximately $230,000. NewEdge Advisors LLC boosted its stake in shares of MidCap Financial Investment by 4.3% during the second quarter. NewEdge Advisors LLC now owns 24,430 shares of the company’s stock valued at $308,000 after purchasing an additional 1,000 shares in the last quarter. Jane Street Group LLC purchased a new position in MidCap Financial Investment during the second quarter valued at approximately $191,000. Finally, Ameriprise Financial Inc. increased its holdings in MidCap Financial Investment by 16.6% during the second quarter. Ameriprise Financial Inc. now owns 402,636 shares of the company’s stock valued at $5,081,000 after buying an additional 57,406 shares during the period. 28.45% of the stock is currently owned by institutional investors.

More MidCap Financial Investment News

Here are the key news stories impacting MidCap Financial Investment this week:

• Positive Sentiment: MFIC reported second-quarter net investment income of $0.40 per share, up from $0.38 in the prior quarter and above analyst estimates of approximately $0.36–$0.37. MFIC Financial Results
• Positive Sentiment: The board declared a quarterly dividend of $0.31 per share, representing an annualized yield of roughly 12.8% at the referenced share price. The dividend is payable September 24 to shareholders of record September 8. MFIC Dividend and Results
• Positive Sentiment: MFIC repurchased 2.76 million shares for $31.9 million at a discount to NAV, generating approximately $0.07 per share of NAV accretion and supporting per-share value.
• Positive Sentiment: Truist lowered its price target from $13 to $12 but maintained a Buy rating, implying substantial upside from current levels. Benzinga
• Neutral Sentiment: Management reported significant net repayments of $160 million, limited new commitments of $6 million and net leverage of 1.54x. The earnings call focused on capital allocation and balancing leverage with market conditions. MFIC Earnings Call Transcript
• Negative Sentiment: NAV fell 3.2% to $13.37 per share, primarily because of credit-related weakness in several portfolio positions. MFIC posted a $17.5 million net loss for the quarter, or $0.21 per share, versus a profit in the year-earlier period.

About MidCap Financial Investment

MidCap Financial Investment Corporation (NASDAQ: MFIC) is a business development company that provides financing solutions to middle-market companies across the United States. The firm specializes in direct lending and asset-based financing, offering a range of debt instruments designed to support working capital needs, equipment acquisitions, lease financing and corporate recapitalizations. Its focus on senior secured loans, unitranche structures and equipment financings positions it to serve clients in sectors such as manufacturing, healthcare, transportation and energy.

Through its lending platform, MidCap Financial Investment Corporation partners with privately held and sponsor-backed companies that typically generate annual revenues between $25 million and $500 million.