Apollo Investment Corp. (AINV, Financial) declared its most recent quarterly dividend of 15 cents on Aug. 8, accompanying the company’s first-quarter 2019 earnings announcement. The dividend gives the company a forward dividend yield of 10.40% at the stock’s current price of $5.75. In market trading following the dividend and earnings announcement, the stock is down -2.7% versus a loss of -1.0% for the S&P 500.
Company profile
Apollo Investment is a business development company investing in private middle-market companies, public companies and structured products. The company reports three main categories for revenue generation: non-controlled/non-affiliated investments, non-controlled/affiliated investments and controlled investments. The business is managed as a portfolio with revenues generated from interest, dividends, payments in kind and asset sales.
Dividend
The company’s recent quarterly dividend of 15 cents bring total payouts for the year to 45 cents. The dividend has been holding steady at 15 cents since Aug. 4, 2016, when it decreased from 20 cents. As a business development company, Apollo devotes a significant portion of its net income to dividends with its trailing 12-month payout ratio now at 181.8%.
The recently announced dividend has an ex-dividend date of Sept. 21. It is payable on Oct. 9 in the company’s third quarter of 2019.
Earnings results
Apollo announced its first-quarter 2019 earnings results after the market’s close on Aug. 8. The company reported revenue of $63.59 million, beating analysts’ estimates by $1.26 million but reporting a decrease from the comparable quarter of -4.7%. Net investment income for the quarter was $31.5 million, or 15 cents per share.
Value and Return
Apollo Investment has been providing investors with stable returns over the past five years. Year to date, it is outperforming the S&P 500 with a return of 7.24%. For the one-, three- and five-year periods, it has an annualized return of 1.59%, 4.29% and 3.03%.
The company’s portfolio investments are broadly diversified, as shown in the following chart:
Source: Apollo Investment Corporation
Analysts believe the stock has some potential upside over the next year with an average one-year price target of $6.41. Investors can also rely on regular quarterly distributions from the company’s income with its high dividend yield of 10.40% supporting its total return.
Disclosure: I do not own shares of Apollo Investment.
