GECC has announced its financial results for the first quarter, revealing a net asset value (NAV) per share of $12.57. The company achieved a record total investment income of $12.5 million during this period. This growth was largely fueled by cash flows from its CLO joint venture and income generated from new investments. The net investment income (NII) surpassed the company's increased quarterly distribution.
Looking forward, GECC anticipates further increases in NII in the second quarter and is confident in its ability to maintain distributions throughout 2025. The company remains vigilant of the unpredictable macroeconomic climate and is committed to strategically investing in opportunities that offer strong risk-adjusted returns, aiming to provide substantial value to its shareholders.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 2 analysts, the average target price for Great Elm Capital Corp (GECC, Financial) is $11.00 with a high estimate of $11.00 and a low estimate of $11.00. The average target implies an upside of 9.89% from the current price of $10.01. More detailed estimate data can be found on the Great Elm Capital Corp (GECC) Forecast page.
Based on the consensus recommendation from 4 brokerage firms, Great Elm Capital Corp's (GECC, Financial) average brokerage recommendation is currently 2.8, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
GECC Key Business Developments
Release Date: March 11, 2025
- Net Investment Income (NII): $2.1 million or $0.20 per share in Q4 2024, down from $4.1 million or $0.39 per share in Q3 2024.
- Net Assets: $136 million as of December 31, 2024, up from $126 million as of September 30, 2024.
- NAV per Share: $11.79 as of December 31, 2024.
- Asset Coverage Ratio: 169.7% as of December 31, 2024, compared to 166.2% as of September 30, 2024.
- Total Debt Outstanding: Approximately $195 million as of December 31, 2024.
- Cash and Money Market Securities: Approximately $8 million as of December 31, 2024.
- Quarterly Dividend: Increased to $0.37 per share for Q1 2025, up 5.7% from the prior quarter.
- Annualized Dividend Yield: 12.6% based on December 31, 2024, NAV.
- Market Capitalization: Increased from around $60 million to over $120 million over 2023 and 2024.
- Net Earnings: In excess of $3.60 per share over 2023 and 2024.
- Total Return on Stock: Nearly 80% over the period, outperforming relevant indices.
- First Lien Loans: Comprised 71% of the corporate portfolio at year-end 2024.
- CLO JV Distributions: $3.2 million in Q3 2024 and $3.8 million to date in Q1 2025.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Great Elm Capital Corp (GECC, Financial) increased its quarterly base dividend by 6% to $0.37 per share for the first quarter of 2025, reflecting confidence in its financial position.
- The company's market capitalization doubled from $60 million to over $120 million over the past two years, showcasing significant growth.
- GECC's net asset value (NAV) per share increased by over $0.60, and the company reported net earnings in excess of $3.60 per share.
- The formation of a joint venture to invest in CLOs is expected to enhance cash generation and provide high returns over time.
- GECC's asset coverage ratio improved to 169.7% as of December 31, 2024, indicating a strong financial position.
Negative Points
- The fourth quarter saw a decline in net investment income (NII) due to uneven cash flows from CLOs and temporary impacts from equity raises.
- The company's NAV per share decreased due to dividends exceeding NII in the period.
- The refinancing of debt and new shelf registration led to a $0.03 impact on NII per share.
- The company's earnings were affected by the lumpiness of cash distributions from CLOs, which are uneven at the beginning of their life.
- There is a potential risk associated with the company's investment in Maverick Gaming, which is marked at a distressed level.
