Fidus Investment Corporation (NASDAQ:FDUS)

I don’t know, this green thumb feels very foolish (small “f”) especially since the market continues hitting all-time highs and is over 23K DJIA today. But I cannot help but notice this little BDC seems to have been overlooked by investors, at least to some extent.

I observed a few pretty amazing items within the financials. First, their net profit margin is somewhere close to 62% of revenues. That is crazy high, even for a BDC. Second, they pay a 9.7% dividend, and their payout ratio is right around 80%. I am not thrilled by their cash flow (or lack thereof), but from what I am seeing in their investment portfolio, cash flow should right itself over time. Their SG&A expenses are super low, which leads me to believe this is a tightly managed little firm. Even with the good financials, I don’t think there is a ton of upside appreciation available here. BDC’s just are not given much value beyond their book value in normal circumstances. It looks like their plan is to continue to grow this little firm, but they’ll need additional equity / debt financing to make that happen. Maybe they can stretch this to $20 a share but I doubt it goes much higher than that.

From a macro perspective, maybe I shouldn’t be concerned, but I am becoming very worried about a sizeable correction in the market. Especially after the enormous run higher we have experienced over the past ~9 years. Maybe it keeps going higher, but it feels like the downside has a higher likelihood than further upside. A stable dividend payer, with some small upside potential feels much safer than some of the Momo stocks that have ruled the day for the past 9 years. I have bought a little bit of this and may add more in future. Please do your own research as my track record with green thumbs isn’t nearly as good as other active Caps players.

Net operating cash flow has significantly increased by 118.79% to $4.90 million when compared to the same quarter last year.
And the current dividend yield is over 9%