Sixth Street Specialty Lending (NYSE:TSLX) Posts Earnings Results, Misses Expectations By $0.07 EPS

Key Points

• Q1 EPS missed: Sixth Street Specialty Lending reported EPS of $0.42, missing the consensus of $0.49 by $0.07 and down from $0.58 a year ago, with a net margin of 37.99% and ROE of 12.71%.
• Dividend sharply reduced: The company paid a quarterly dividend of $0.01 (annualized $0.04, 0.2% yield) and has a dividend payout ratio of 101.66%, indicating the payout may be unsustainable.
• Insiders buying amid analyst cuts: VP Alan Waxman purchased 200,000 shares at about $18.18 (insiders bought 545,000 shares in the last 90 days), while analysts have trimmed price targets but the consensus remains a "Moderate Buy" with a target of $21.64.

Sixth Street Specialty Lending (NYSE:TSLX - Get Free Report) posted its quarterly earnings data on Tuesday. The financial services provider reported $0.42 earnings per share (EPS) for the quarter, missing analysts' consensus estimates of $0.49 by ($0.07), Zacks reports. Sixth Street Specialty Lending had a net margin of 37.99% and a return on equity of 12.71%. During the same quarter in the previous year, the business posted $0.58 EPS.

Sixth Street Specialty Lending Stock Down 0.4%

Shares of TSLX traded down $0.07 during midday trading on Tuesday, hitting $19.69. The company had a trading volume of 402,488 shares, compared to its average volume of 905,508. The stock has a market cap of $1.87 billion, a price-to-earnings ratio of 10.88 and a beta of 0.65. The company's 50 day moving average price is $18.35 and its 200 day moving average price is $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. Sixth Street Specialty Lending has a 52 week low of $16.99 and a 52 week high of $25.17.

Sixth Street Specialty Lending Cuts Dividend

The business also recently disclosed a quarterly dividend, which was paid on Tuesday, March 31st. Shareholders of record on Monday, March 16th were issued a dividend of $0.01 per share. This represents a $0.04 annualized dividend and a yield of 0.2%. The ex-dividend date of this dividend was Monday, March 16th. Sixth Street Specialty Lending's dividend payout ratio (DPR) is currently 101.66%.

Insider Activity at Sixth Street Specialty Lending

In other news, VP Alan Waxman purchased 200,000 shares of the stock in a transaction dated Monday, March 9th. The stock was acquired at an average cost of $18.18 per share, for a total transaction of $3,636,000.00. Following the acquisition, the vice president owned 500,000 shares of the company's stock, valued at $9,090,000. The trade was a 66.67% increase in their ownership of the stock. The acquisition was disclosed in a filing with the SEC, which is accessible through this link. In the last ninety days, insiders purchased 545,000 shares of company stock valued at $9,997,150. 3.83% of the stock is currently owned by company insiders.

Institutional Trading of Sixth Street Specialty Lending

A number of institutional investors and hedge funds have recently modified their holdings of TSLX. Advisory Services Network LLC acquired a new position in shares of Sixth Street Specialty Lending in the 3rd quarter valued at about $75,000. Arax Advisory Partners bought a new position in Sixth Street Specialty Lending in the fourth quarter worth about $109,000. Atlas Capital Advisors Inc. bought a new position in Sixth Street Specialty Lending in the fourth quarter worth about $111,000. Northwestern Mutual Wealth Management Co. acquired a new position in Sixth Street Specialty Lending in the fourth quarter valued at approximately $118,000. Finally, Glenview Trust co bought a new position in shares of Sixth Street Specialty Lending during the second quarter valued at approximately $231,000. 70.25% of the stock is owned by institutional investors and hedge funds.

Wall Street Analyst Weigh In

Several research firms recently issued reports on TSLX. Keefe, Bruyette & Woods dropped their price target on shares of Sixth Street Specialty Lending from $23.00 to $22.00 and set an "outperform" rating on the stock in a research note on Tuesday, February 17th. Royal Bank Of Canada decreased their price objective on shares of Sixth Street Specialty Lending from $24.00 to $22.00 and set an "outperform" rating for the company in a research report on Friday, February 20th. Weiss Ratings lowered Sixth Street Specialty Lending from a "buy (b-)" rating to a "hold (c+)" rating in a research report on Friday, February 20th. Wells Fargo & Company cut their price target on Sixth Street Specialty Lending from $22.00 to $20.00 and set an "overweight" rating on the stock in a research note on Tuesday, February 17th. Finally, Citizens Jmp reduced their price target on Sixth Street Specialty Lending from $25.00 to $24.00 and set a "market outperform" rating for the company in a report on Wednesday, April 22nd. One research analyst has rated the stock with a Strong Buy rating, five have issued a Buy rating and two have assigned a Hold rating to the stock. According to MarketBeat, the stock has a consensus rating of "Moderate Buy" and a consensus target price of $21.64.

Sixth Street Specialty Lending Company Profile

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.