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Fidus Investment One Of The 'Best Positioned' BDCs

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Baird still believes Fidus Investment Corp (NASDAQ: FDUS) remains one of the best positioned BDCs in the sector as it reiterated its Outperform rating and $17 price target on the shares, implying an upside of 8 percent from current levels.

A business development company is an organization that invests in and helps small- and medium-size companies grow in the initial stages of their development.

Fidus reported second quarter adjusted NII/share of $0.38, a penny behind Baird estimate and the $0.39/share quarterly dividend rate. Further, NAV/share increased sequentially to $15.52 from $15.25.

"FDUS has grown its NAV/share by $0.70/share since going public in 2Q11 and stands as one of only a handful of BDCs with a 3+ year operating history that have grown NAV/share since IPO," analyst Bryce Rowe wrote in a note.

On the balance sheet front, Fidus raised $43.7 million in net proceeds from a 2.875 million share common equity offering in late May and its SBA borrowings remained unchanged at $214 million. The analyst said the recently expanded SBIC legislation could ultimately provide Fidus up to $350 million in SBA borrowing capacity.

Rowe's $17 price target is based on a dividend discount model assuming 2016 dividends of $1.56, discounted at 10 percent assuming a 1 percent sustainable growth rate.

"Given its defensively positioned, liquidity-rich balance sheet coupled with its proven ability to preserve capital and generate attractive risk-adjusted returns, we continue to believe that FDUS should trade at a sustained premium to its peer group," Rowe added.

Latest Ratings for FDUS

DateFirmActionFromTo
Aug 2019DowngradesBuyNeutral
Jun 2019Initiates Coverage OnBuy
Jan 2017Initiates Coverage OnMarket Perform

View More Analyst Ratings for FDUS
View the Latest Analyst Ratings

Posted-In: Baird Bryce RoweAnalyst Color Earnings News Reiteration Analyst Ratings

 

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