TCP Capital Corp. (NASDAQ:TCPC)

CAPS Rating: 5 out of 5


Player Avatar drbat (56.04) Submitted: 6/5/2013 10:31:25 AM : Outperform Start Price: $12.37 TCPC Score: -6.18

TCPC has been growing its portfolio, NAV, earnings, and sustainable dividends, currently yielding 9.0% (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.

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