Stellus Capital Investment Corporation Plans Monthly Dividend of $0.11 (NYSE:SCM)

Key Points

• Monthly dividend of $0.1133 declared (record/ex-dividend April 30, payable May 15), which implies an annualized yield of about 13.7%.
• Payout coverage is a concern: the company currently has a reported payout ratio of 107.9% (relying on its balance sheet to fund the dividend), though analysts forecast $1.45 EPS next year which would reduce the expected payout ratio to roughly 93.8% on a $1.36 annual dividend.
• Recent stock and financial snapshot: shares rose 2.6% to $9.94 with a market cap of $287.6M; liquidity ratios are weak (quick/current ratio 0.14) and the last quarter missed estimates (EPS $0.29 vs $0.31, revenue $23.98M vs $26.33M).

Stellus Capital Investment Corporation (NYSE:SCM - Get Free Report) declared a monthly dividend on Tuesday, April 14th. Shareholders of record on Thursday, April 30th will be paid a dividend of 0.1133 per share by the investment management company on Friday, May 15th. This represents a c) annualized dividend and a yield of 13.7%. The ex-dividend date of this dividend is Thursday, April 30th.

Stellus Capital Investment has raised its dividend by an average of 0.1%per year over the last three years. Stellus Capital Investment has a dividend payout ratio of 107.9% meaning the company cannot currently cover its dividend with earnings alone and is relying on its balance sheet to cover its dividend payments. Research analysts expect Stellus Capital Investment to earn $1.45 per share next year, which means the company should continue to be able to cover its $1.36 annual dividend with an expected future payout ratio of 93.8%.

Stellus Capital Investment Stock Up 2.6%

NYSE:SCM traded up $0.26 during trading hours on Wednesday, hitting $9.94. 163,938 shares of the company traded hands, compared to its average volume of 239,523. The company has a quick ratio of 0.14, a current ratio of 0.14 and a debt-to-equity ratio of 1.13. The firm's 50-day simple moving average is $10.01 and its 200-day simple moving average is $11.60. Stellus Capital Investment has a one year low of $8.43 and a one year high of $15.39. The company has a market cap of $287.62 million, a PE ratio of 10.57 and a beta of 0.67.

Stellus Capital Investment (NYSE:SCM - Get Free Report) last released its earnings results on Wednesday, March 11th. The investment management company reported $0.29 EPS for the quarter, missing analysts' consensus estimates of $0.31 by ($0.02). The business had revenue of $23.98 million for the quarter, compared to the consensus estimate of $26.33 million. Stellus Capital Investment had a return on equity of 10.28% and a net margin of 26.48%. Equities analysts predict that Stellus Capital Investment will post 1.74 earnings per share for the current year.

About Stellus Capital Investment

Stellus Capital Investment Corporation NYSE: SCM is a closed-end, externally managed business development company that provides debt and equity financing to middle market companies in the United States. As an investment vehicle specializing in private credit, Stellus focuses on originating and structuring senior secured loans, unitranche facilities, mezzanine debt, and equity co-investments tailored to the unique needs of growing businesses. Its flexible capital solutions are designed to support acquisitions, recapitalizations, growth initiatives, and balance sheet refinancings.

Operating under an evergreen structure, Stellus Capital Investment partners with a diverse group of portfolio companies across industries such as manufacturing, healthcare, business services, and specialty finance.

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