Main Street Capital Corp (MAIN), a BDC, is one of the most interesting firms on the market right now (business development company). Main Street Capital is not a REIT or an energy MLP, as are most high-yielding companies on the market.
What type of company is Main Street Capital?
Main Street is a major investment firm that offers lower middle market enterprises with long-term loan and equity financing, as well as debt capital to middle market companies. Main Street’s portfolio investments are primarily used to fund management buyouts, recapitalizations, expansion financings, refinancings, and acquisitions of businesses in a variety of industries. Within its lower middle market portfolio, Main Street attempts to partner with entrepreneurs, business owners, and management teams, and generally provides “one-stop” financing options. Lower middle market enterprises on Main Street typically have yearly revenues of $10 million to $150 million. Main Street’s medium market debt investments are in companies that are generally larger in size than the companies in its lower middle market portfolio.
The common stock of Main Street trades under the ticker “MAIN” on the New York Stock Exchange (“NYSE”).
Is Main Street Capital A Good Investment?
Since its founding, Main Street Capital has delivered exceptional total returns, making it one of the highest-quality BDCs. It’s back on track to growth mode, thanks to management’s significant alignment of interest with shareholders. Meanwhile, it retains a robust balance sheet, which is one of the reasons why I believe the shares are currently undervalued.
Is Main a REIT?
Main Street Capital is not a REIT or an energy MLP, as are most high-yielding companies on the market. The company invests in smaller, private companies, both in equity and debt, and benefits from the gap in capital costs between what those tiny companies must pay and what larger, publicly traded companies can capture.
How often does Main Street Capital pay dividends?
Summary of Dividends The dividend cover is roughly 1.0, and there are normally 12 payouts each year (excluding specials). Main Street Capital Corporation was predicted with 98 percent accuracy using our premium tools.
Is Main a BDC?
A business development corporation, or BDC, is Main Street Capital (MAIN). BDCs essentially serve a market of small businesses that traditional banks are unwilling to touch, assisting them in funding acquisitions, leveraged buyout (LBO) deals, recapitalizations, and expansion projects.
What does Main Street Capital Corporation do?
We offer lower middle market enterprises “one-stop” capital solutions (private debt and private equity capital) as well as debt financing to middle market companies. Lower middle market enterprises on Main Street typically have yearly revenues of $10 million to $150 million. While Main Street invests in enterprises that are normally larger in size, medium market debt investments are made by Main Street. We provide a multitude of benefits to entrepreneurs, business owners, management teams, and financial sponsors through our two business divisions in order to assist each organization reach its maximum potential and generate wealth for its owners.
What are Main Street investors?
Main Street is frequently referred to as the polar opposite of Wall Street in the financial world. It can be used to differentiate between an individual small investment and a professional securities trader.
This can lead to some highly acrimonious attitudes on one or both sides. Some Wall Street traders, for example, view Main Street investors as amateurs playing a game they don’t comprehend. Wall Street traders may appear to Main Street investors as fraudsters with a void where their souls should be.
The unpleasant reality is that both sides are extremely reliant on one another. Individual investors provide the funds and fees that keep the lights on on Wall Street. Wall Street is required by Main Street to generate a higher rate of return than a savings account or a municipal bond. Unfortunately, their mutual reliance does not overcome their differences.
Is MAIN Street Capital a good dividend stock?
Is Main Street Capital a worthwhile dividend investment? The yearly dividend paid by Main Street Capital is $2.52 per share, with a current dividend yield of 5.72 percent. MAIN is a leading dividend provider, with a dividend yield that exceeds 75% of all dividend-paying equities.
Is MAIN a good dividend stock?
Main Street pays out monthly dividends and a supplemental payout twice a year. The current monthly dividend yield is $0.205 per share, with a $0.24 supplemental dividend. Assuming they continue unchanged, that translates to $2.94 in dividends over the next 12 months (12 x $0.205 plus 2 x $0.24). On a stock currently trading around $43, that’s a 6.8% yield.
This month, Main Street paid off a $175 million loan. It added another $75 million in debt in December to the $150 million loan it took out in April of this year. The increased finance, together with the corporation’s $750 million credit line, ensures that the company has adequate cash on hand to carry out its operations.
In addition, Main Street’s at-the-market (ATM) equity issuance program raised $9.3 million in the third quarter. Using the ATM, Main Street made $53.8 million in the first nine months of the year.
This type of application is really straightforward. The issuer, in this example Main Street, sets aside a specific number of shares that it may sell in the future. It gives the issuer a lot of flexibility because it lets them determine when, how much, and at what price they want to sell their shares in the market. It isn’t necessary for everything to happen at the same time. Since 2015, Main Street has successfully used ATMs to raise capital.
In comparison to its BDC peers and commercial banks, Main Street says that its internal management provides significant cost savings. It has 1.25 percent operating costs as a percentage of total assets. That number exceeded 3% for its BDC peers with total assets of more than $500 million.
Commercial banks fared slightly better, with a rate of around 2.5 percent. Main Street asserts that its internal managed structure aligns management’s interests with those of shareholders by not paying external management fees.
Main Street appears to be a good dividend-paying investment based on its past performance. The dividend should be maintained in the future with smart financial maneuvering.
Economic headwinds, such as a recession, might, of course, wreak havoc on some of its holdings, putting pressure on the dividend and stock price. Main Street, on the other hand, should be able to thrive and weather any crises due to its diversification across business areas, industries, and the balance of loan and equity components.
Is MAIN a buy or sell?
0 (0 percent) of analysts recommend MAIN as a Strong Buy, 2 (66.67 percent) recommend MAIN as a Buy, 1 (33.33 percent) recommends MAIN as a Hold, 0 (0 percent) recommends MAIN as a Sell, and 0 (0 percent) recommends MAIN as a Strong Sell. What is MAIN’s expected earnings growth in 2021-2022?
Is Main a good investment?
Traditional banks have higher fixed expenses and smaller profitability than MAIN. As Main Street expands, their business model’s economies of scale will improve even more. MAIN stock could profit from monthly dividends, NAV accretion from fresh share issuance, and some tax and regulatory reforms.
