Alcentra Capital Corp. (ABDC, Financial) is a subsidiary company of Bank of New York Mellon (BK, Financial), providing subordinated debt and equity capital to middle market companies. It announced its earnings for the fourth quarter and full year of 2016 on March 9. The company also announced a quarterly dividend of 34 cents per share and a special cash dividend of three cents per share for the first quarter of 2017.
The stock is currently selling at $13.25 with a year to date gain of approximately 10.75%. Both the quarterly and special dividend have an ex-dividend date of March 29 and are payable on April 6. With the newly announced dividend, the company has a dividend yield of 10.26%.
Alcentra initially offered public shares in May 2014 and has been steadily growing its business which focuses on debt and equity capital for middle market companies with revenues between $10.0 million and $250.0 million. The company’s investments focus on growth initiatives, including change of ownership transactions, recapitalizations, strategic acquisitions and business expansions.
For the fourth quarter of 2016, Alcentra reported a revenue increase of 25.6% from the comparable quarter at $10.9 million with a revenue beat of $1.31 million. The quarter’s earnings per share also beat estimates by 10 cents at 45 cents.
For 2016 revenue was $40.6 million, an increase from $33.9 million in 2015. Earnings per share were also higher at $1.66, an increase from $1.43.
The company ended the fourth quarter with the majority of its portfolio in first lien debt at 37%. Debt accounted for 92% of the portfolio overall with 58% of the debt investments in floating rate issuance.
A snapshot of the company’s new investments in the fourth quarter of 2016 is also below:
The company is not broadly held by hedge fund managers and reports 17% ownership from institutional wealth managers. The top institutional investors are Mellon Capital Management and BNY Mellon Wealth Management. Advisors Asset Management also has ownership of 6.37%.
Disclosure: I do not own any shares of Alcentra Capital Corp.
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