Sixth Street Specialty Lending (NYSE:TSLX) Reaches New 12-Month Low - What's Next?

Key Points

• Sixth Street Specialty Lending hit a new 52-week low, trading as low as $16.23 after recent weakness in the share price.
• Analysts have trimmed price targets on the stock, though the consensus remains a Moderate Buy with an average target of $19.83.
• The company recently raised its quarterly dividend to $0.42 per share, which implies a 10.2% yield, even as its latest earnings missed Wall Street expectations.

Shares of Sixth Street Specialty Lending, Inc. (NYSE:TSLX - Get Free Report) reached a new 52-week low on Wednesday . The company traded as low as $16.23 and last traded at $16.48, with a volume of 695183 shares trading hands. The stock had previously closed at $16.25.

Analyst Upgrades and Downgrades

A number of research analysts recently issued reports on TSLX shares. Keefe, Bruyette & Woods cut their price objective on Sixth Street Specialty Lending from $21.00 to $18.50 and set an "outperform" rating for the company in a research note on Thursday, May 7th. Weiss Ratings downgraded shares of Sixth Street Specialty Lending from a "hold (c)" rating to a "hold (c-)" rating in a report on Monday, May 18th. Truist Financial dropped their price target on shares of Sixth Street Specialty Lending from $22.00 to $20.00 and set a "buy" rating for the company in a research report on Thursday, May 7th. JPMorgan Chase & Co. reduced their price objective on shares of Sixth Street Specialty Lending from $18.50 to $17.50 and set a "neutral" rating for the company in a research note on Thursday, May 7th. Finally, Royal Bank Of Canada decreased their price objective on shares of Sixth Street Specialty Lending from $22.00 to $20.00 and set an "outperform" rating on the stock in a research report on Thursday, May 7th. Five investment analysts have rated the stock with a Buy rating, two have issued a Hold rating and one has given a Sell rating to the company. According to MarketBeat.com, the company has an average rating of "Moderate Buy" and an average price target of $19.83.

Sixth Street Specialty Lending Stock Performance

The company has a quick ratio of 3.39, a current ratio of 3.39 and a debt-to-equity ratio of 1.17. The business has a 50 day moving average price of $17.79 and a two-hundred day moving average price of $19.31. The stock has a market cap of $1.57 billion, a P/E ratio of 14.33 and a beta of 0.60.

Sixth Street Specialty Lending (NYSE:TSLX - Get Free Report) last issued its earnings results on Tuesday, May 5th. The financial services provider reported $0.42 earnings per share (EPS) for the quarter, missing the consensus estimate of $0.49 by ($0.07). Sixth Street Specialty Lending had a net margin of 25.25% and a return on equity of 11.92%. The business had revenue of $93.40 million for the quarter, compared to the consensus estimate of $103.14 million. During the same period last year, the business posted $0.58 EPS. On average, sell-side analysts forecast that Sixth Street Specialty Lending, Inc. will post 1.71 earnings per share for the current fiscal year.

Sixth Street Specialty Lending Increases Dividend

The business also recently disclosed a quarterly dividend, which will be paid on Tuesday, June 30th. Stockholders of record on Monday, June 15th will be given a dividend of $0.42 per share. The ex-dividend date is Monday, June 15th. This is an increase from Sixth Street Specialty Lending's previous quarterly dividend of $0.01. This represents a $1.68 annualized dividend and a dividend yield of 10.2%. Sixth Street Specialty Lending's dividend payout ratio (DPR) is 146.09%.

Insider Activity at Sixth Street Specialty Lending

In related news, VP Ross Anthony Bruck bought 8,000 shares of the stock in a transaction dated Monday, May 11th. The shares were purchased at an average price of $17.76 per share, with a total value of $142,080.00. Following the completion of the acquisition, the vice president owned 18,250 shares of the company's stock, valued at $324,120. This represents a 78.05% increase in their ownership of the stock. The purchase was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website. Company insiders own 3.83% of the company's stock.

Hedge Funds Weigh In On Sixth Street Specialty Lending

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

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.

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