- Full-Year Distributable Earnings (DE): $616 million ($1.69/share), adjusted to $1.95 ($1.92/share dividend coverage) after timing issues and asset sale losses.
- Commercial Lending Growth: $1.7 billion in originations ($823 million funded growth), projecting $17 billion portfolio by Q1 2026 ($0.46/share DE contribution).
- Infrastructure Lending Performance: $386 million new loan commitments, $2.6 billion originations ($0.07/share DE), with CLOs at record-low SOFR spreads.
- Capital Markets Activity: $4.4 billion in transactions executed, $1.4 billion liquidity, and 2.4x debt-to-equity ratio (1.0x lower than peers).
- Net Lease Business Expansion: $2 billion in long-term accretive assets from acquisition, $12 million DE in first quarter, and $466 million securitization to boost returns.
Segment Performance
The diversified lines of business continue to perform at scale, with $12.7 billion in deployments in 2025, including $6.4 billion in commercial lending and $2.6 billion in infrastructure lending. Commercial lending contributed DE of $176 million, or $0.46 per share, with $1.7 billion of loans originated and $823 million of funded loan growth. The commercial lending portfolio is expected to grow to a record $17 billion in the first quarter 2026.
Credit Trends and Outlook
The company is cautiously optimistic about the market, with a focus on resolving legacy credit and maintaining a conservative balance sheet. The goal is to resolve $1 billion in credit issues this year, and the company has already made significant progress in reducing its GAAP book value loss. The infrastructure lending business is seeing a significant growth opportunity driven by energy consumption and LNG exports.
Valuation and Dividend
With a P/E Ratio of 14.51 and a Dividend Yield of 10.84%, the stock appears to be reasonably valued. The company's strong earnings trend and efforts to maximize shareholder value are positives. The net debt to EBITDA ratio is -0.38, indicating a healthy balance sheet. Analysts estimate next year's revenue growth at 16.4%, which could lead to further upside.
Business Strategy and Future Plans
The company is investing in tools and technology to streamline underwriting, asset management, and reporting processes. The net lease business is expected to become a more meaningful contributor to run-rate earnings over time, with a large pipeline and expected increased volumes. The company's priorities for 2026 include resolving legacy credit, maintaining a conservative balance sheet, and selectively growing its highest returning businesses.