Sixth Street Specialty Lending (NYSE:TSLX) Sets New 1-Year Low - Should You Sell?

Key Points

• Sixth Street Specialty Lending hit a new 52-week low, falling to $16.96 before last trading around $17.17. The stock was down 0.9% on the day and remains below both its 50-day and 200-day moving averages.
• Analysts turned more cautious after earnings and target cuts. Zacks downgraded the stock to “strong sell,” while several firms lowered price targets; the company also missed Q1 EPS and revenue estimates in its latest report.
• The company boosted its quarterly dividend sharply to $0.42 per share, implying a 9.8% annualized yield. However, the payout ratio is high at 160%, which may raise sustainability concerns.

Sixth Street Specialty Lending, Inc. (NYSE:TSLX - Get Free Report)'s share price reached a new 52-week low during trading on Friday . The company traded as low as $16.96 and last traded at $17.1660, with a volume of 277411 shares traded. The stock had previously closed at $17.36.

Wall Street Analyst Weigh In

TSLX has been the topic of a number of research reports. Zacks Research downgraded Sixth Street Specialty Lending from a "hold" rating to a "strong sell" rating in a report on Thursday, May 7th. Royal Bank Of Canada dropped their target price on Sixth Street Specialty Lending from $22.00 to $20.00 and set an "outperform" rating on the stock in a report on Thursday, May 7th. JPMorgan Chase & Co. dropped their target price on Sixth Street Specialty Lending from $18.50 to $17.50 and set a "neutral" rating on the stock in a report on Thursday, May 7th. Wells Fargo & Company dropped their target price on Sixth Street Specialty Lending from $20.00 to $19.00 and set an "overweight" rating on the stock in a report on Thursday, May 7th. Finally, Keefe, Bruyette & Woods dropped their target price on Sixth Street Specialty Lending from $21.00 to $18.50 and set an "outperform" rating on the stock in a report on Thursday, May 7th. Five research analysts have rated the stock with a Buy rating, two have assigned a Hold rating and one has issued a Sell rating to the company's stock. According to MarketBeat, the company presently has an average rating of "Moderate Buy" and an average target price of $19.83.

Sixth Street Specialty Lending Trading Down 0.9%

The business has a 50 day simple moving average of $18.24 and a two-hundred day simple moving average of $20.03. The company has a current ratio of 3.39, a quick ratio of 3.39 and a debt-to-equity ratio of 1.17. The stock has a market cap of $1.63 billion, a price-to-earnings ratio of 14.96 and a beta of 0.65.

Sixth Street Specialty Lending (NYSE:TSLX - Get Free Report) last issued its quarterly earnings data on Tuesday, May 5th. The financial services provider reported $0.42 earnings per share for the quarter, missing analysts' consensus estimates 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 analyst estimates of $103.14 million. During the same quarter last year, the business earned $0.58 EPS. As a group, equities analysts anticipate that Sixth Street Specialty Lending, Inc. will post 1.71 EPS for the current year.

Sixth Street Specialty Lending Increases Dividend

The firm also recently disclosed a quarterly dividend, which will be paid on Tuesday, June 30th. Shareholders of record on Monday, June 15th will be paid a dividend of $0.42 per share. This is a boost from Sixth Street Specialty Lending's previous quarterly dividend of $0.01. The ex-dividend date is Monday, June 15th. This represents a $1.68 dividend on an annualized basis and a yield of 9.8%. Sixth Street Specialty Lending's payout ratio is 160.00%.

Insider Buying and Selling

In other Sixth Street Specialty Lending news, VP Alan Waxman acquired 45,000 shares of the stock in a transaction on Tuesday, March 10th. The stock was purchased at an average price of $18.47 per share, for a total transaction of $831,150.00. Following the purchase, the vice president directly owned 545,000 shares in the company, valued at $10,066,150. This trade represents a 9.00% increase in their ownership of the stock. The acquisition was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. Also, VP Ross Anthony Bruck acquired 8,000 shares of the stock in a transaction on Monday, May 11th. The shares were acquired at an average price of $17.76 per share, with a total value of $142,080.00. Following the purchase, the vice president owned 18,250 shares in the company, valued at $324,120. This represents a 78.05% increase in their ownership of the stock. The disclosure for this purchase is available in the SEC filing. In the last 90 days, insiders have acquired 553,000 shares of company stock valued at $10,139,230. 3.83% of the stock is owned by insiders.

Institutional Inflows and Outflows

Several hedge funds have recently made changes to their positions in the company. Quantum Portfolio Management LLC acquired a new position in shares of Sixth Street Specialty Lending in the 1st quarter worth approximately $273,434,000. Strs Ohio boosted its position in Sixth Street Specialty Lending by 101.8% during the 1st quarter. Strs Ohio now owns 4,347,710 shares of the financial services provider's stock valued at $79,911,000 after purchasing an additional 2,193,551 shares during the period. Sound Income Strategies LLC boosted its position in Sixth Street Specialty Lending by 2.4% during the 1st quarter. Sound Income Strategies LLC now owns 2,571,052 shares of the financial services provider's stock valued at $46,562,000 after purchasing an additional 59,937 shares during the period. Van ECK Associates Corp boosted its position in Sixth Street Specialty Lending by 18.0% during the 3rd quarter. Van ECK Associates Corp now owns 2,529,187 shares of the financial services provider's stock valued at $57,817,000 after purchasing an additional 385,398 shares during the period. Finally, Progeny 3 Inc. boosted its position in Sixth Street Specialty Lending by 1.0% during the 2nd quarter. Progeny 3 Inc. now owns 2,476,398 shares of the financial services provider's stock valued at $58,963,000 after purchasing an additional 23,451 shares during the period. Institutional investors and hedge funds own 70.25% of the company's stock.

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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