Fidus Investment: 9% Covered Yield, Growth And Special Dividend Potential

Core Viewpoint - Fidus Investment Corporation is recognized for its substantial special dividend distributions to shareholders, maintaining a stable net asset value year-over-year despite significant portfolio income distributions [1][21][22] Dividend and Income Analysis - The core dividend pay-out ratio for Fidus Investment in Q1 was 73%, indicating strong underlying dividend coverage [9][22] - The company paid special dividends totaling $0.38 per share in 2024, nearly equivalent to a full regular quarterly dividend [3] - Regular dividends are set at $0.43 per share per quarter, yielding approximately 9%, while factoring in special dividends, the yield could reach 12% based on a projected total payout of $0.59 per share for Q2 2024 [11][14][22] Portfolio Performance - Fidus Investment's portfolio reached a record value of $1.05 billion, reflecting a 9% quarter-over-quarter increase due to strong loan demand and net investment activity of $85.6 million in Q1 [6] - The equity investments constituted 12.6% of the total portfolio, with net realized capital gains of $280 million since the IPO in 2011, showcasing effective equity investment strategies [7][8] Valuation and Market Position - The current stock price is at a slight premium of 1% to net asset value, which is considered low given the company's strong special dividend history [13][14] - Fidus Investment's net asset value per share is reported at $19.36, with an intrinsic value range estimated between $21.30 and $22.26, suggesting potential for valuation expansion [17][22] - Compared to peers like Ares Capital Corp. and Blue Owl Capital Corp., Fidus Investment has re-rating potential, with expectations of advancing to a 1.10-1.15x net asset value multiple if equity performance remains strong [16]