Stellus Capital Investment (NYSE:SCM) Releases Earnings Results, Beats Estimates By $0.30 EPS

Key Points

• Stellus Capital Investment beat quarterly expectations: It reported earnings of $0.56 per share versus the $0.26 consensus estimate, while revenue reached $30.98 million compared with expectations of $24.38 million.
• The company declared a monthly dividend of $0.0833 per share, implying an annualized yield of approximately 11.8%; its payout ratio stands at 121.95%.
• Investor sentiment remains mixed: Insiders purchased shares recently, but analyst ratings produced a consensus “Hold” recommendation with a $9.50 target price, while SCM traded near $8.44.

Stellus Capital Investment (NYSE:SCM - Get Free Report) posted its quarterly earnings results on Monday. The investment management company reported $0.56 earnings per share for the quarter, topping analysts' consensus estimates of $0.26 by $0.30, FiscalAI reports. Stellus Capital Investment had a net margin of 23.59% and a return on equity of 9.69%. The business had revenue of $30.98 million for the quarter, compared to the consensus estimate of $24.38 million.

Stellus Capital Investment Stock Up 0.4%

NYSE:SCM traded up $0.03 during trading hours on Monday, reaching $8.44. The company's stock had a trading volume of 152,345 shares, compared to its average volume of 224,175. The company has a debt-to-equity ratio of 1.05, a current ratio of 0.04 and a quick ratio of 0.04. The company has a market cap of $244.34 million, a price-to-earnings ratio of 10.29 and a beta of 0.65. Stellus Capital Investment has a one year low of $6.83 and a one year high of $15.04. The business's 50-day moving average is $8.21 and its 200-day moving average is $9.47.

Stellus Capital Investment Announces Dividend

The firm also recently disclosed a monthly dividend, which will be paid on Thursday, October 15th. Investors of record on Wednesday, September 30th will be issued a $0.0833 dividend. The ex-dividend date is Wednesday, September 30th. This represents a c) dividend on an annualized basis and a yield of 11.8%. Stellus Capital Investment's dividend payout ratio is currently 121.95%.

Insiders Place Their Bets

In related news, Director J Tim Arnoult purchased 9,000 shares of Stellus Capital Investment stock in a transaction on Tuesday, May 19th. The stock was bought at an average price of $9.05 per share, with a total value of $81,450.00. Following the completion of the transaction, the director directly owned 50,869 shares of the company's stock, valued at approximately $460,364.45. This represents a 21.50% increase in their ownership of the stock. The acquisition was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through this link. Insiders bought 10,700 shares of company stock worth $96,523 in the last 90 days. 4.24% of the stock is owned by company insiders.

Institutional Inflows and Outflows

A number of hedge funds have recently made changes to their positions in SCM. Royal Bank of Canada raised its stake in shares of Stellus Capital Investment by 15.8% in the 1st quarter. Royal Bank of Canada now owns 27,882 shares of the investment management company's stock valued at $390,000 after acquiring an additional 3,808 shares in the last quarter. Jane Street Group LLC bought a new stake in Stellus Capital Investment during the first quarter worth approximately $157,000. Brevan Howard Capital Management LP bought a new stake in Stellus Capital Investment during the second quarter worth approximately $154,000. BNP Paribas Financial Markets acquired a new position in Stellus Capital Investment during the second quarter valued at approximately $60,000. Finally, Group One Trading LLC grew its holdings in Stellus Capital Investment by 112.3% during the second quarter. Group One Trading LLC now owns 11,401 shares of the investment management company's stock valued at $159,000 after purchasing an additional 6,030 shares during the last quarter. Institutional investors and hedge funds own 13.22% of the company's stock.

Analyst Upgrades and Downgrades

A number of research analysts have commented on SCM shares. Keefe, Bruyette & Woods lowered their target price on Stellus Capital Investment from $9.00 to $8.00 and set a "market perform" rating on the stock in a research note on Monday, July 20th. Weiss Ratings lowered Stellus Capital Investment from a "hold (c-)" rating to a "sell (d+)" rating in a research report on Tuesday, July 28th. LADENBURG THALM/SH SH cut their price target on Stellus Capital Investment from $12.00 to $11.00 and set a "buy" rating for the company in a research note on Wednesday, May 13th. Wall Street Zen upgraded Stellus Capital Investment from a "sell" rating to a "hold" rating in a report on Saturday, May 16th. Finally, Zacks Research raised Stellus Capital Investment from a "strong sell" rating to a "hold" rating in a research note on Friday, May 15th. One analyst has rated the stock with a Buy rating, two have issued a Hold rating and one has assigned a Sell rating to the company. According to MarketBeat.com, the company has a consensus rating of "Hold" and a consensus target price of $9.50.

Stellus Capital Investment Company Profile

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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