The Year That Was 2012 for Main Street Capital


With 2012 squarely in the rearview mirror, it's a perfect time to see how some favorite financial stocks fared throughout the year. While past performance does not indicate future results, looking at recent successes and failures can be a good place to start as you build your investment thesis.

Today, I'm going to take a look at Main Street Capital Corporation , a stock that I personally own from the world of business development. Here is a quick look at some important stats for the company:

2012 Stock Return


Market Cap


Total Assets


Price-to-Earnings Ratio


Price-to-Book Value


Dividend Yield


Similar companies

Apollo Investment Corporation ;
Prospect Capital ;
Triangle Capital Corporation

Source: Yahoo! Finance. Total assets as of quarter ending September 2012

The year in review
Most of the news out of Main Street Capital this year regarded two things : new investments and dividend increases. Its focus as a business development company is on providing equity capital and financing to "lower middle market companies," so many of these announced investments were relatively small in the world of investing, though these investments did help grow the assets of the company over the year.

As is the case with most BDCs, most investors like these kinds of companies because of their impressive dividend yields, which are a result of their REIT-like structure that requires them to pay out a large portion of earnings as dividends to shareholders. Main Street Capital is a bit unique among its peers, however, because of its decision to pay out its dividends monthly instead of quarterly. Last year was no different, though the company did announce increases to its dividend quarterly last year , as well as a special $0.35 per share dividend that was paid last week.

Also in the news last year for Main Street Capital last year was two supplemental offerings of shares to the market. The first, which occurred in June, raised over $93 million for the company to use to make equity investments per its mission, as well as retire some debt and pay other expenses. In December, the second offering raised a little over $77 million , was used for similar purposes.

What it all means
Without delving into the minutiae of what companies Main Street Capital actually invested in, it might seem like 2012 was a pretty boring year for the company. However, the two supplemental offerings indicate that the company is looking to continue its strong performance going forward, and CEO Vincent D. Foster indicated that the company is poised to continue paying robust monthly dividends, as well as special dividends at the end of both 2013 and 2014 .

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Robert Eberhard owns shares of Main Street Capital Corporation. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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