UPDATE: Stifel Nicolaus Initiates Stellus Capital to Buy on Yield Return

Stifel Nicolaus initiated coverage on Stellus Capital

with a Buy rating and a $16 price target. Stifel Nicolaus noted, "SCM's sizable IPO portfolio removes the cash-drag of deploying its IPO capital and provides immediate earnings and dividends for shareholders. SCM has agreed to a minimum 9.0% dividend yield on its IPO price of $15.00/share, which is equivalent to $1.35/share. Management has indicated it will waive their incentive fee as necessary to achieve the 9.0% yield. We estimate SCM will generate $1.45/share in NOI earnings for full year 2013, allowing them to more than fully cover their initial dividend yield of 9.0%." Stellus Capital closed at $15.32 on Friday.