Sixth Street Specialty Lending, Inc. (NYSE:TSLX) Announces Dividend Increase - $0.42 Per Share

Key Points

• Sixth Street Specialty Lending declared a quarterly dividend of $0.42 per share (record/ex-dividend June 15, payable June 30), a 4,100% increase from the prior $0.01 and implying a 9.4% yield.
• The company missed expectations this quarter—reported $0.42 EPS vs. $0.49 expected and $93.4M revenue vs. $103.1M est.—and the stock fell about 8.3%; TSLX trades at roughly a 10x PE with a market cap near $1.71B.
• Insiders have been buying (VP purchased 45,000 shares; insiders added 545,000 shares in 90 days), but the dividend carries a high payout ratio (82.1% now, projected ~93.4% next year) which could strain coverage if earnings decline.

Sixth Street Specialty Lending, Inc. (NYSE:TSLX - Get Free Report) declared a quarterly dividend on Tuesday, May 5th. Shareholders of record on Monday, June 15th will be given a dividend of 0.42 per share by the financial services provider on Tuesday, June 30th. This represents a c) annualized dividend and a yield of 9.4%. The ex-dividend date is Monday, June 15th. This is a 4,100.0% increase from Sixth Street Specialty Lending's previous quarterly dividend of $0.01.

Sixth Street Specialty Lending has decreased its dividend payment by an average of 0.0%per year over the last three years. Sixth Street Specialty Lending has a dividend payout ratio of 82.1% meaning its dividend is currently covered by earnings, but may not be in the future if the company's earnings fall. Analysts expect Sixth Street Specialty Lending to earn $1.97 per share next year, which means the company should continue to be able to cover its $1.84 annual dividend with an expected future payout ratio of 93.4%.

Sixth Street Specialty Lending Trading Down 8.3%

Shares of TSLX stock opened at $17.97 on Wednesday. The firm has a 50 day moving average price of $18.35 and a two-hundred day moving average price of $20.41. The company has a quick ratio of 2.83, a current ratio of 2.83 and a debt-to-equity ratio of 1.08. The company has a market capitalization of $1.71 billion, a PE ratio of 9.96 and a beta of 0.65. Sixth Street Specialty Lending has a 12-month low of $16.99 and a 12-month high of $25.17.

Sixth Street Specialty Lending (NYSE:TSLX - Get Free Report) last posted its earnings results on Tuesday, May 5th. The financial services provider reported $0.42 EPS for the quarter, missing the consensus estimate of $0.49 by ($0.07). The firm had revenue of $93.40 million during the quarter, compared to analyst estimates of $103.14 million. Sixth Street Specialty Lending had a net margin of 37.99% and a return on equity of 12.71%. During the same period in the previous year, the company posted $0.58 EPS. As a group, analysts predict that Sixth Street Specialty Lending will post 1.97 earnings per share for the current year.

Insider Buying and Selling at Sixth Street Specialty Lending

In related news, VP Alan Waxman bought 45,000 shares of Sixth Street Specialty Lending stock in a transaction dated Tuesday, March 10th. The shares were bought at an average cost of $18.47 per share, with a total value of $831,150.00. Following the acquisition, the vice president owned 545,000 shares in the company, valued at $10,066,150. This trade represents a 9.00% increase in their position. The transaction was disclosed in a document filed with the SEC, which is available through this link. In the last ninety days, insiders acquired 545,000 shares of company stock worth $9,997,150. Corporate insiders own 3.83% of the company's stock.

Hedge Funds Weigh In On Sixth Street Specialty Lending

Several hedge funds have recently bought and sold shares of TSLX. Royal Bank of Canada lifted its holdings in shares of Sixth Street Specialty Lending by 8.0% during the 1st quarter. Royal Bank of Canada now owns 124,241 shares of the financial services provider's stock worth $2,780,000 after acquiring an additional 9,230 shares during the period. Integrated Wealth Concepts LLC boosted its holdings in shares of Sixth Street Specialty Lending by 38.5% in the 1st quarter. Integrated Wealth Concepts LLC now owns 16,539 shares of the financial services provider's stock valued at $370,000 after purchasing an additional 4,597 shares in the last quarter. Invesco Ltd. increased its stake in shares of Sixth Street Specialty Lending by 8.0% in the 2nd quarter. Invesco Ltd. now owns 30,628 shares of the financial services provider's stock valued at $729,000 after purchasing an additional 2,263 shares during the last quarter. Marshall Wace LLP increased its stake in shares of Sixth Street Specialty Lending by 186.6% in the 2nd quarter. Marshall Wace LLP now owns 75,811 shares of the financial services provider's stock valued at $1,805,000 after purchasing an additional 49,362 shares during the last quarter. Finally, Glenview Trust co acquired a new position in shares of Sixth Street Specialty Lending during the 2nd quarter worth $231,000. 70.25% of the stock is owned by institutional investors.

About Sixth Street Specialty Lending

Sixth Street Specialty Lending Inc NYSE: TSLX is a closed-end, externally managed business development company that provides flexible debt financing solutions to middle-market companies. The fund primarily targets senior secured loans, unitranche facilities, mezzanine debt, second-lien financings and equity co-investment opportunities. By structuring tailored capital solutions, Sixth Street Specialty Lending seeks to support growth initiatives, recapitalizations and refinancings across a diverse set of industries, including technology, healthcare and business services.

As an affiliate of Sixth Street Partners, a global alternative investment firm, the company leverages the broader platform’s credit research, operational expertise and industry relationships.

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