dennis mccain
  • Home
  • Investing
    • Dividend Kings
    • Div Aristocrats
    • Div Champions
    • Business Dev Cos
    • Monthly Dividends
  • Options
    • Weekly Options

Investing

Ideas and Strategies on Investing.

Previous Articles

Triangle Capital Corporation

9/18/2014

0 Comments

 
Dividend growth investors normally aren't interested in accumulating shares in Business Development Companies (BDC) like Triangle Capital Corporation. But investors interested in a healthy current stream of income, however, are often very interested. I personally believe that even dividend growth investors can benefit from owning a few shares of a BDC. 

Picture

Companies like Triangle can help any investor increase his current income and assist that investor in the early stages of accumulating positions in dividend growth companies. The downside to owning shares in companies like this is that the stagnant dividend is subject to the deteriorating effects of inflation. Without increasing dividends, purchasing power will decrease over time. Smart investors will greatly appreciate these dividends and diversify their portfolios.


The Company
Triangle Capital Corporation (TCAP) is a BDC (Business Development Company) specializing in private equity and mezzanine investments. It focuses on leveraged buyouts, management buyouts, ESOPs, change of control transactions, acquisition financings, growth financing, and recapitalizations in lower middle market, mature, and later stage companies. The firm prefers to make investments in many business sectors including energy, manufacturing, distribution, transportation, communications, restaurants, media, health services, and others. It primarily invests in companies located in the United States, with emphasis on the Southeast and Mid-Atlantic. The firm makes equity investments between $1 million and $25 million and debt investments between $5 million and $30 million per transaction, in companies having annual revenues between $20 million and $200 million and EBITDA between $3 million and $35 million and can also co-invest. It primarily invests in senior subordinated debt securities secured by second lien security interests in portfolio company assets, coupled with equity interests. The firm also invests in senior debt securities secured by first lien security interests in portfolio companies. Triangle Capital Corporation was founded in 2002 and is based in Raleigh, North Carolina. (Daily Chart) (Weekly Chart)
16 September 2014
Price $26.50
1yr Target $29.63
Analysts 4
1yr Cap Gain 11.81%
Dividend $2.16
Yield 8.15%
1yr Tot Return 19.96%

Market Cap $740.41 Mil
Payout Ratio 77.10%
Beta 0.61
EPS (ttm) $2.80
EPS next yr $2.40
P/E 9.46

PEG 1.89

Forward P/E 11.04

Debt/Equity 0.84
ROA 9.60%
ROE 17.50%



The Fundamentals
Revenues have been on a pretty steady incline for the last few years as can be seen in the data below. The one exception during this period was 2009 when the US was experiencing a rather severe recession and companies weren't borrowing to expand their businesses. Earnings, however, have been erratic at best. Up years were followed by down years which were followed by up years, etc. 

Dividends have been the most consistent but they have been consistent at a cost (see below). The cost has been allowing the payout ratio to vary from 54.19% to 344.68% over this period. Without more stability in future earnings, the payout will continue to vary for the next couple of years. Eventually things will start to settle down and it's reasonable to expect that future dividends will begin to increase at a rate more in line with the expected rate of increase in revenues and/or earnings (near 10%). 

There are many things that can influence future revenues and earnings like inflation, management's ability to raise funds through borrowing and secondary stock offerings, management's ability to make loans, and the ability of their customers to stay out of bankruptcy. As a result, companies like Triangle Capital Corporation have to be monitored regularly, but the dividend income these companies produce is excellent. 
 
Year
2015 Est
2014 Est
2013
2012
2011
2010
2009
2008
2007
Revenues
$121.74 Mil
$102.98 Mil
$80.79 Mil
$73.95 Mil
$52.46 Mil
$28.20 Mil
$20.86 Mil
$21.35 Mil
$12.73 Mil
Earnings
$2.40
$2.18
$2.94
$2.25
$2.90
$1.99
$0.47
$1.11
$1.31
Dividends
$
$
$2.16
$2.02
$1.77
$1.65
$1.62
$1.13
$0.71
Payout Ratio
%
%
73.46%
89.77%
61.03%
82.91%
344.68%
101.80%
54.19%
Revenue Growth Rate
1 year = 9.24%
2 year = 24.09%
3 year = 41.52%
4 year = 40.28%
5 year = 30.49%

Earnings Growth Rate
1 year = 30.66%
2 year = 0.68%
3 year = 13.74%
4 year = 58.14%
5 year = 21.50%

Dividend Growth Rate
1 year = 6.93%
2 year = 10.46%
3 year = 9.29%
4 year = 7.45%
5 year = 13.83%



The Technicals
The technicals aren't providing any information on the future direction for this stock. With the RSI and MACD both near the centerline on both the daily and weekly chart, the charts are telling me that this company is moving sideways, at least for the near future. The ADX shows that there's no pressure by the buyers or sellers trying to push the stock either up or down. Once again this indicator is telling me that this company is moving sideways. 
 
Picture
Daily Chart
Picture
Weekly Chart


Conclusion
I like BDCs and there are a number of them available to invest in. I have an entire section devoted to listing 35 BDCs that are worth investigating located here. While I consider this company to be a good investment for an investor like me looking for current income with minimal growth, my favorite BDC is Prospect Capital Corporation (PSEC). I intend to build a small position in Triangle Capital Corporation in the near future to augment my current dividend income. If the company is able to stabilize and increase its dividend annually at a rate near 10%, I'll likely add to that position in the future. 


The Live Interactive Chart


Additional Articles of Interest

"Prospect Capital Corporation Redux" dated 17 December 2013

"Prospect Capital Corp" dated 2 September 2013

Picture
Picture
0 Comments



Leave a Reply.

    Print Friendly Version of this pagePrint Get a PDF version of this webpagePDF

    Picture

    Author

    I am an Individual Investor with specific interest in long term growth and then enhancing my returns with income from dividends and derivatives. I don't recommend stocks to anyone (it's a good way to lose friends) and no one reading this should misinterpret my blog as a recommendation for any type of investment. I am writing this solely for myself and my kids.


    RSS Feed


    Picture
    Top 100 Blogs for Dividend Investors

    Picture
    Follow Me on StockTwits!



    Dividend Growth Stocks
    Dividend Growth Investor


    Picture
    I'm on Seeking Alpha too!

    Archives

    August 2018
    July 2018
    June 2018
    May 2018
    April 2018
    March 2018
    February 2018
    January 2018
    December 2017
    November 2017
    October 2017
    September 2017
    August 2017
    July 2017
    June 2017
    May 2017
    April 2017
    March 2017
    February 2017
    January 2017
    December 2016
    November 2016
    October 2016
    September 2016
    August 2016
    July 2016
    June 2016
    May 2016
    April 2016
    March 2016
    February 2016
    January 2016
    December 2015
    November 2015
    October 2015
    September 2015
    August 2015
    July 2015
    June 2015
    May 2015
    April 2015
    March 2015
    February 2015
    January 2015
    December 2014
    November 2014
    October 2014
    September 2014
    August 2014
    July 2014
    June 2014
    May 2014
    April 2014
    March 2014
    February 2014
    January 2014
    December 2013
    November 2013
    October 2013
    September 2013
    August 2013


    ADDITIONAL RESOURCES:
    4 Month INDU Chart
    Dividend Ex-Dates
    Bidness Etc
    SharpCharts Voyeur
    StockCharts.com

    FINVIZ
    Seeking Alpha
    BDC Reporter
    Roadmap2Retire
    DivHut
    Dividend Growth Investor

    Dividend Yield

    Stock Market Mentor
    Chart Swing Trader
    Dividend Announcements
    IBD TV
    Stocks to Watch Today
    Dividend Detective

    DISCLAIMER
     I am not a licensed investment adviser, and I am not providing investment advise for you on this site. Please consult with an investment professional before you invest your money. Any opinion expressed here should not be treated as investment advice. I am not liable for any losses suffered by any party because of data or information published on this blog. Past performance is not a guarantee of future performance. Unless your investments are FDIC insured, they may decline in value.

    Picture
Powered by Create your own unique website with customizable templates.