New Mountain Finance (NASDAQ: NMFC ) operates as a business development company that aims to provide attractive total returns through its portfolio of debt investments. As the name implies, NMFC generates its earnings by lending capital toFinancial analyst by day and a seasoned investor by passion, I've been involved in the world of investing for over 15 years and honed my skills in analyzing lucrative opportunities within the market.I specialize in uncovering high quality dividend stocks and other assets t ...

Group 1: Market Sentiment and Analyst Ratings - The article highlights a significant disparity in analyst ratings, with 81% of S&P 500 companies rated as Buy, which is unusually high given current market conditions influenced by AI disruptions [2][3] - Analysts are more inclined to issue Sell ratings, as they allow for potential upgrades, making contrarian strategies appealing for investors [3] Group 2: Company Profiles and Performance - Prospect Capital (PSEC) is a business development company (BDC) with a yield of 18.7%, but it has faced challenges, including three dividend cuts in the past decade, leading to a consensus Sell rating from analysts [4][6] - BlackRock TCP Capital Corp. (TCPC) has a yield of 15.7% and is considered a consensus Sell, but most analysts rate it as Hold, indicating a less negative outlook compared to PSEC [6][8] - Cheniere Energy Partners LP (CQP) has a yield of 6.1% and is investing heavily in expansions, which may lead to increased distributable cash flow in the future despite a recent reduction in variable distributions [9][11] - Innovative Industrial Properties (IIPR), a REIT focused on the cannabis industry, has a yield of 14.4% but faces a challenging regulatory environment, leading to a bearish consensus among analysts [12][15]

Group 1 - Fidus Investment (NASDAQ: FDUS) reported Q2 results with a total dividend yield of 10.7% [1] - The company has the same NII price yield and is trading at a 9% premium to NAV [1] - The article suggests exploring Systematic Income for income portfolios that consider both yield and risk management [1]

Market Overview - The current market is characterized as a "hated bull market" with stock prices at all-time highs and tight fixed income spreads [1] - Despite the strong market performance, there are concerns regarding the underlying economy and its future prospects [1] Analyst Background - Roberts Berzins has over a decade of experience in financial management, focusing on helping top-tier corporates with financial strategies and large-scale financings [1] - He has contributed to institutionalizing the REIT framework in Latvia to enhance the liquidity of pan-Baltic capital markets [1] - His policy-level work includes developing national SOE financing guidelines and frameworks for channeling private capital into affordable housing [1] - Berzins holds a CFA Charter and an ESG investing certificate, and has experience with the Chicago Board of Trade [1]

Group 1 - The article emphasizes the importance of a diversified investment strategy that combines classic dividend growth stocks with Business Development Companies, REITs, and Closed End Funds to enhance investment income while achieving total returns comparable to traditional index funds [1] - The author highlights a hybrid investment system that balances growth and income, aiming for a total return that aligns with the performance of the S&P 500 [1]

Company Overview - Chicago Atlantic BDC has closed over $2.8 billion in loans since its platform inception[11] - The company has a near-term pipeline under evaluation of approximately $780 million[11] - The total portfolio investment value is $308 million[11] - The gross weighted-average yield of the company's debt investments is 16.1%[11] - 100% of the company's current debt investments are senior secured[11] Financial Performance - Gross investment income for the quarter ended June 30, 2025, was $13.1 million[35] - Net investment income for the same quarter was $7.7 million[35] - Net asset value at the end of the period was $301.8 million[35] - Net investment income per share was $0.34[35] - Net asset value at the end of the period per share was $13.23[35] Portfolio Composition - Cannabis investments represent 78% of the total fair value of the company's investment portfolio[40] - Non-cannabis investments account for 22% of the portfolio[40] - Floating rate debt accounts for 76.3% of debt investments fair value[38] - 45.8% of floating rate debt is at their respective floor[38]

Group 1 - Fidelis Insurance Holdings Limited (FIHL) has been added to the Zacks Rank 5 (Strong Sell) List due to a 42.9% downward revision in the Zacks Consensus Estimate for its current year earnings over the last 60 days [1] - Flowco Holdings Inc. (FLOC) is also on the Zacks Rank 5 (Strong Sell) List, with a 3.4% downward revision in the Zacks Consensus Estimate for its current year earnings over the last 60 days [2] - WhiteHorse Finance, Inc. (WHF) has been included in the Zacks Rank 5 (Strong Sell) List, experiencing a 4.1% downward revision in the Zacks Consensus Estimate for its current year earnings over the last 60 days [2]

Core Viewpoint - Crescent Capital BDC, Inc. reported its financial results for the quarter ended June 30, 2025, highlighting a net investment income of $0.46 per share and a net income of $0.41 per share, with a net asset value (NAV) per share of $19.55 [1][4]. Financial Performance - Net investment income for the second quarter was impacted by a one-time accelerated amortization of $0.02 per share related to deferred financing costs [1]. - Investment income increased to $43.0 million from $42.1 million in the previous quarter, with interest income rising to $40.1 million [6]. - Total net expenses for the quarter were $26.1 million, compared to $25.5 million in the previous quarter [7]. Dividend Declarations - The Board declared a regular cash dividend of $0.42 per share for the third quarter of 2025, payable on October 15, 2025 [2]. - A special dividend of $0.05 per share will be paid on September 15, 2025 [2]. Share Repurchase Program - The Board authorized a stock repurchase program to buy back up to $20.0 million of common stock in the open market [3]. Investment Portfolio - As of June 30, 2025, the company had investments in 187 portfolio companies with a fair value of $1,600.7 million [5]. - The portfolio comprised various asset types, with the largest being unitranche first lien loans at $1,043.6 million, representing 65.2% of the total investments [5]. Liquidity and Capital Resources - As of June 30, 2025, the company had $26.1 million in cash and cash equivalents and $227.2 million of undrawn capacity on its credit facilities [8]. - The weighted average cost of debt was 6.09%, and the debt to equity ratio stood at 1.23x [8].

Core Insights - Crescent Capital BDC reported net investment income of $0.46 per share and net income of $0.41 per share for the quarter ended June 30, 2025, with a net asset value (NAV) per share of $19.55 [1][4] Financial Performance - Total investment income increased to $43.0 million for the quarter ended June 30, 2025, compared to $42.1 million for the previous quarter [6] - Net investment income for the quarter was $16.9 million, slightly up from $16.6 million in the prior quarter [4][6] - The company experienced net realized losses of $2.9 million and a net change in unrealized gains of $1.0 million for the quarter [4][6] Dividend Declarations - The Board declared a regular cash dividend of $0.42 per share for the third quarter of 2025, payable on October 15, 2025 [2] - A special dividend of $0.05 per share will be paid on September 15, 2025 [2] Share Repurchase Program - The Board authorized a stock repurchase program to buy back up to $20.0 million of common stock in the open market [3] Investment Portfolio - As of June 30, 2025, the company had investments in 187 portfolio companies with a fair value of $1,600.7 million [5] - The portfolio consisted primarily of unitranche first lien loans, making up 65.2% of the total investments [5] Liquidity and Capital Resources - The company had $26.1 million in cash and cash equivalents and $227.2 million of undrawn capacity on its credit facilities as of June 30, 2025 [8] - The weighted average cost of debt was 6.09%, with a debt to equity ratio of 1.23x [8] Upcoming Events - A conference call to discuss the financial results for the quarter ended June 30, 2025, is scheduled for August 14, 2025 [9]

Core Insights - The article emphasizes the importance of a hybrid investment strategy that combines classic dividend growth stocks with Business Development Companies, REITs, and Closed End Funds to enhance investment income while achieving total returns comparable to traditional index funds [1]. Investment Strategy - The investment approach focuses on high-quality dividend stocks and assets that provide long-term growth potential, which can significantly contribute to income generation [1]. - The strategy aims to create a balanced portfolio that captures total returns on par with the S&P index, demonstrating the effectiveness of blending growth and income investments [1].