National Securities upgraded shares of Main Street Capital (NYSE:MAIN) from a sell rating to a neutral rating in a report issued on Monday, MarketBeat.com reports. National Securities currently has $35.00 price target on the financial services provider’s stock, up from their prior price target of $33.00.
“• For 4Q17, MAIN posted NII/share of $0.64/share, exceeding consensus by a penny and falling in-line with the company’s pre-announced preliminary results from 1/16/18. The results were substantially above the $0.57/share quarterly dividend although on the call management guided towards slightly lower NII for 1Q18.
• With very stable yields and an extremely low cost of capital, new investments by MAIN should continue to be highly accretive to earnings. We expect NII/share growth of 3.8% and 5.4% Y/Y for 2018 and 2019, respectively, with step-ups in the regular dividend during both years.
• Credit quality remains strong as non-accruals at amortized cost declined to $47.0 million or 2.3% of the portfolio compared with $55.2 million or 2.6% of the portfolio Q/Q as one non-accrual was restructured. NAV/share finished 2017 at $23.53, a substantial increase from $22.10 Y/Y. We expect NAV/share to improve to $23.98 and $24.61 in 4Q18 and 4Q19, respectively, as a result of what we expect will continue to be stable credit quality, an out-earned dividend, net realized gains, and highly accretive secondary equity issuances.
• We are revising our 2018 NII/share estimate to $2.48 from $2.42 and are rolling out our 2019 NII/share estimate of $2.61. We are also upgrading shares to NEUTRAL from SELL and increasing our price target to $35 from $33. The upgrade reflects the recent selloff in MAIN shares as well as the continued outperformance of the company relative to peers and our opinion that earnings prospects remain very bright for the company. As previously stated, our prior rating of “sell” was never to be taken as a negative view of the company operationally but rather due to valuation. With the shares down from the highs and the next two years appearing to have better earnings than we had previously thought, we believe it is prudent to upgrade the stock here.,” the firm’s analyst commented.
Several other equities research analysts have also recently issued reports on the stock. Zacks Investment Research cut shares of Main Street Capital from a buy rating to a hold rating in a research note on Wednesday, January 10th. ValuEngine cut shares of Main Street Capital from a buy rating to a hold rating in a research note on Monday, February 5th. Finally, Raymond James Financial raised shares of Main Street Capital from an underperform rating to a market perform rating in a research note on Tuesday, November 7th. One equities research analyst has rated the stock with a sell rating, six have given a hold rating and two have issued a buy rating to the stock. The company has an average rating of Hold and an average target price of $39.58.
Main Street Capital (NYSE:MAIN) last released its quarterly earnings results on Thursday, February 22nd. The financial services provider reported $0.64 earnings per share (EPS) for the quarter, topping the Thomson Reuters’ consensus estimate of $0.63 by $0.01. Main Street Capital had a net margin of 82.93% and a return on equity of 10.34%. The company had revenue of $55.80 million for the quarter, compared to analysts’ expectations of $53.17 million. During the same period last year, the company earned $0.57 EPS. The firm’s revenue for the quarter was up 19.2% compared to the same quarter last year. sell-side analysts predict that Main Street Capital will post 2.39 earnings per share for the current fiscal year.
The business also recently announced a monthly dividend, which will be paid on Monday, April 16th. Investors of record on Wednesday, March 21st will be given a $0.19 dividend. The ex-dividend date of this dividend is Tuesday, March 20th. This represents a $2.28 annualized dividend and a dividend yield of 6.41%. Main Street Capital’s dividend payout ratio is presently 76.25%.
Institutional investors and hedge funds have recently added to or reduced their stakes in the stock. Ladenburg Thalmann Financial Services Inc. boosted its position in shares of Main Street Capital by 89.1% in the third quarter. Ladenburg Thalmann Financial Services Inc. now owns 148,463 shares of the financial services provider’s stock worth $5,904,000 after acquiring an additional 69,939 shares during the last quarter. Wellington Shields Capital Management LLC boosted its position in shares of Main Street Capital by 72.0% in the third quarter. Wellington Shields Capital Management LLC now owns 59,700 shares of the financial services provider’s stock worth $2,373,000 after acquiring an additional 25,000 shares during the last quarter. Texas Yale Capital Corp. boosted its position in shares of Main Street Capital by 9.3% in the third quarter. Texas Yale Capital Corp. now owns 70,423 shares of the financial services provider’s stock worth $2,799,000 after acquiring an additional 6,000 shares during the last quarter. Magnetar Financial LLC acquired a new stake in shares of Main Street Capital in the third quarter worth approximately $1,056,000. Finally, Texan Capital Management boosted its position in shares of Main Street Capital by 96,443.2% in the third quarter. Texan Capital Management now owns 140,953 shares of the financial services provider’s stock worth $5,603,000 after acquiring an additional 140,807 shares during the last quarter. 27.47% of the stock is currently owned by institutional investors and hedge funds.
Main Street Capital Company Profile
Main Street Capital Corporation (MSCC) is a principal investment firm. MSCC’s principal investment objective is to maximize its portfolio’s total return by generating current income from the Company’s debt investments and capital appreciation from its equity and equity related investments, including warrants, convertible securities and other rights to acquire equity securities in a portfolio company.
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