Why TCP Capital Is Poised to Outperform

Brian Pacampara, The Motley Fool
Updated

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, business development company TCP Capital has earned a coveted five-star ranking.

With that in mind, let's take a closer look at TCP and see what CAPS investors are saying about the stock right now.

TCP facts

Market Cap

$344.1 million

Trailing-12-Month Revenue

$57.0 million

Management

Chairman / CEO Howard Levkowitz
President / COO Rajneesh Vig

Dividend Yield

8.8%

Alternatives

American Capital
Main Street Capital
MCG Capital


Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, all 18 members who have rated TCP believe the stock will outperform the S&P 500 going forward.

Just last week, one of those Fools, All-Star drbat, succinctly summed up the TCP bull case for our community:

TCPC has been growing its portfolio, NAV, earnings, and sustainable dividends, currently yielding 9% (or 9.6% including special dividends), in a prudent manner by keeping leverage lower than most, and investing in safer types of investments with variable rates ready to take advantage of any potential rate increases. The current valuations of TCPC are lower to average compared to most BDCs. Given the favorable risk profile and decent dividend, I would price TCPC with higher-than-average NAV multiples (also using the recently reported NAV of $15.14) and average P/E multiples giving it a target price of $20.

If you want market-topping returns, you need to put together the best portfolio you can. Of course, despite its strong five-star rating, TCP may not be your top choice.

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The article Why TCP Capital Is Poised to Outperform originally appeared on Fool.com.

Fool contributor Brian Pacampara has no position in any stocks mentioned. 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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