Palmer Square Capital BDC (NYSE:PSBD) Releases Quarterly Earnings Results, Misses Estimates By $0.04 EPS

Key Points

• Palmer Square Capital BDC reported quarterly EPS of $0.39, missing the $0.43 consensus estimate by $0.04. Net investment income fell to $12.0 million from $13.8 million a year earlier, while NAV per share declined to $13.21 from $13.30.
• The company declared a third-quarter base dividend of $0.36 per share, matching quarterly net investment income and representing a 14.4% annualized yield based on the reported share price.
• Credit metrics remained resilient, with a 0.29% non-accrual rate and a 96% senior-secured portfolio. PSBD also expanded its share-repurchase authorization to $30 million and reduced the cost of its BDC CLO debt.

Palmer Square Capital BDC (NYSE:PSBD - Get Free Report) announced its quarterly earnings data on Wednesday. The company reported $0.39 earnings per share (EPS) for the quarter, missing the consensus estimate of $0.43 by ($0.04), Zacks reports. Palmer Square Capital BDC had a negative net margin of 26.82% and a positive return on equity of 11.01%.

Here are the key takeaways from Palmer Square Capital BDC's conference call:

• Palmer Square Capital BDC generated $0.39 per share of net investment income in the second quarter, matching its $0.39 per-share dividend, including a $0.03 supplemental payment. The board declared a third-quarter base dividend of $0.36 per share.
• Net investment income declined to $12.0 million from $13.8 million a year earlier, primarily reflecting lower base rates, while NAV per share fell to $13.21 from $13.30 amid valuation declines in broadly syndicated loans.
• Management reported resilient credit performance, including a low 0.29% non-accrual rate, a portfolio that is 96% senior secured, diversified across 45 industries, and PIK income equal to only 1.37% of total investment income.
• The company expanded its share repurchase authorization to $30 million, with approximately $4 million used through the second quarter, and expects to deploy the program meaningfully while maintaining appropriate leverage.
• PSBD reset and extended its BDC CLO, reducing the weighted-average debt cost to SOFR plus 1.39% from 1.72% and extending the reinvestment period to 2031; management expects the transaction to be fully accretive beginning in the fourth quarter. Investment activity remains subdued, but discounted liquid-loan and wider-spread private-credit opportunities are emerging.

Palmer Square Capital BDC Price Performance

Shares of NYSE:PSBD traded up $0.12 during mid-day trading on Wednesday, reaching $10.03. 77,974 shares of the company were exchanged, compared to its average volume of 112,933. The firm has a market cap of $312.01 million, a price-to-earnings ratio of -9.64 and a beta of 0.84. The firm's 50-day simple moving average is $10.37 and its 200 day simple moving average is $10.72. Palmer Square Capital BDC has a 1 year low of $9.34 and a 1 year high of $14.43.

Palmer Square Capital BDC Dividend Announcement

The business also recently disclosed a quarterly dividend, which was paid on Monday, July 13th. Stockholders of record on Friday, June 26th were issued a $0.36 dividend. This represents a $1.44 annualized dividend and a dividend yield of 14.4%. The ex-dividend date was Friday, June 26th. Palmer Square Capital BDC's dividend payout ratio is currently -138.46%.

Insider Transactions at Palmer Square Capital BDC

In other news, major shareholder Martin C. Bicknell bought 21,484 shares of the business's stock in a transaction on Tuesday, July 7th. The shares were bought at an average price of $10.47 per share, with a total value of $224,937.48. Following the completion of the transaction, the insider directly owned 373,472 shares in the company, valued at $3,910,251.84. This trade represents a 6.10% increase in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available at this hyperlink. Insiders purchased a total of 108,472 shares of company stock valued at $1,155,558 over the last 90 days. 1.10% of the stock is owned by insiders.

Institutional Investors Weigh In On Palmer Square Capital BDC

Institutional investors and hedge funds have recently modified their holdings of the company. Rivernorth Capital Management LLC acquired a new position in Palmer Square Capital BDC during the 4th quarter worth about $7,077,000. Bank of America Corp DE grew its position in Palmer Square Capital BDC by 22.1% in the 3rd quarter. Bank of America Corp DE now owns 367,035 shares of the company's stock valued at $4,504,000 after acquiring an additional 66,460 shares in the last quarter. Renaissance Technologies LLC increased its stake in Palmer Square Capital BDC by 18.8% during the fourth quarter. Renaissance Technologies LLC now owns 183,000 shares of the company's stock worth $2,231,000 after purchasing an additional 28,900 shares during the period. Millennium Management LLC increased its stake in Palmer Square Capital BDC by 2.0% during the third quarter. Millennium Management LLC now owns 134,249 shares of the company's stock worth $1,647,000 after purchasing an additional 2,638 shares during the period. Finally, Two Sigma Investments LP lifted its position in shares of Palmer Square Capital BDC by 142.9% during the third quarter. Two Sigma Investments LP now owns 131,545 shares of the company's stock worth $1,614,000 after purchasing an additional 77,393 shares in the last quarter. Hedge funds and other institutional investors own 6.52% of the company's stock.

Wall Street Analyst Weigh In

A number of equities analysts recently commented on the company. Zacks Research downgraded Palmer Square Capital BDC from a "hold" rating to a "strong sell" rating in a research report on Friday, May 22nd. Royal Bank Of Canada decreased their target price on shares of Palmer Square Capital BDC from $12.00 to $11.00 and set a "sector perform" rating on the stock in a report on Wednesday, May 27th. Noble Financial assumed coverage on shares of Palmer Square Capital BDC in a research report on Wednesday, June 24th. They set a "neutral" rating on the stock. Wells Fargo & Company set a $11.50 target price on Palmer Square Capital BDC in a research note on Wednesday, June 24th. Finally, UBS Group decreased their price target on Palmer Square Capital BDC from $11.50 to $11.00 and set a "neutral" rating on the stock in a research note on Monday, April 20th. Four research analysts have rated the stock with a Hold rating and one has issued a Sell rating to the stock. Based on data from MarketBeat, the stock presently has an average rating of "Reduce" and a consensus target price of $10.75.

About Palmer Square Capital BDC

Palmer Square Capital BDC Inc NYSE: PSBD is a closed-end, externally managed business development company that provides customized financing solutions to middle-market companies in the United States. The firm offers a broad range of debt and equity products—including first-lien and second-lien senior secured loans, unitranche financings, mezzanine debt and equity co-investments—to support corporate acquisitions, refinancings, growth initiatives and balance sheet restructurings.

PSBD primarily targets established privately owned and sponsored businesses across diverse industries such as healthcare, business services, industrials and consumer products.

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