Download PDF

1. Company Snapshot

1.a. Company Description

Apollo Investment Corporation is business development company and a closed-end, externally managed, non-diversified management investment company.It is elected to be treated as a business development company (“BDC”) under the Investment Company Act of 1940 (the “1940 Act”) specializing in private equity investments in leveraged buyouts, acquisitions, recapitalizations, growth capital, refinancing and private middle market companies.It provides direct equity capital, mezzanine, first lien secured loans, stretch senior loans, unitranche loans, second lien secured loans and senior secured loans, unsecured debt, and subordinated debt and loans.


It also seeks to invest in PIPES transactions.The fund may also invest in securities of public companies that are thinly traded and may acquire investments in the secondary market and structured products.It prefers to invest in preferred equity, common equity / interests and warrants and makes equity co-investments.


It may invest in cash equivalents, U.S. government securities, high-quality debt investments that mature in one year or less, high-yield bonds, distressed debt, non-U.S. investments, or securities of public companies that are not thinly traded.It also focuses on other investments such as collateralized loan obligations (“CLOs”) and credit-linked notes (“CLNs”).The fund typically invests in construction and building materials, business services, plastics & rubber, advertising, capital equipment, education, cable television, chemicals, consumer products/goods durable and non-durable and customer services, direct marketing, energy – oil & gas, electricity and utilities.


The fund also invest in aerospace & defense, wholesale, telecommunications, financial services, hotel, gaming, leisure, restaurants; environmental industries, healthcare and pharmaceuticals, high tech industries, beverages, food and tobacco, manufacturing, media – diversified & production, printing and publishing, retail, automation, aviation and consumer transport, transportation, cargo and distribution.It primarily invests in United States.It primarily invests between $20 million and $250 million in its portfolio companies.


The fund seeks to make investments with stated maturities of five to 10 years.

Show Full description

1.b. Last Insights on MFIC

MidCap Financial Investment Corporation's recent performance was positively driven by its Q4 earnings beat, with quarterly earnings of $0.39 per share exceeding the Zacks Consensus Estimate of $0.37 per share. The company's expanded stock repurchase program also contributed to its positive momentum. Additionally, its diversified portfolio, with 11.4% in software, 9.1% in health care providers, and 6.6% in media, helps mitigate concentration risk. According to MarketBeat.com, the company has a consensus rating of "Hold" from nine analysts, with a price target of $12.75.

1.c. Company Highlights

2. MidCap Financial Investment Corporation's Q4 Earnings: A Closer Look

MidCap Financial Investment Corporation reported net investment income per share of $0.39, beating estimates of $0.37. The company's GAAP net loss per share was $0.14, including $0.04 of one-time financing-related expenses. Total investment income was $78.4 million, a decline of $4.2 million from the prior quarter. Net expenses were $42.4 million, a decline of $4.9 million from the prior quarter. The company's cost of debt declined to 5.95%, and net leverage was 1.45x.

Publication Date: Mar -08

📋 Highlights
  • Net Investment Income vs. GAAP Loss:: NII per share was $0.39, but GAAP net loss per share was $0.14, including $0.04 of one-time financing costs.
  • NAV Decline:: NAV per share fell to $14.18, a 3.3% drop from the prior quarter, driven by legacy 2022 and earlier investments.
  • New Commitments & Funded Activity:: $141M in new commitments across 26 deals, with $25M net funded activity, including $29.5M in Merx repayments.
  • Stock Repurchase Impact:: $12.9M spent to repurchase 1.1M shares at 18% discount, generating $0.03/share NAV accretion; $100M new buyback plan authorized.
  • Cost of Debt & Dividend:: Debt cost reduced to 5.95%, net leverage at 1.45x; declared $0.31/share dividend, up from prior levels.

Investment Activity and Portfolio Performance

The company made $141 million of new commitments across 26 transactions during the quarter, with a weighted average spread of 497 basis points. The weighted average net leverage on new commitments was 4.0x. The portfolio had a fair value of $3.17 billion, invested in 247 companies across 46 industries. Direct origination and other represented 96% of the total portfolio. The company's investment in Merx totaled $103 million at fair value, representing 3% of the portfolio fair value, and Merx repaid an additional $22 million to MidCap Financial Investment Corporation in February.

Share Repurchase and Dividend

The company repurchased approximately 1.1 million shares at an average discount of 18% for an aggregate cost of $12.9 million, generating $0.03 per share of NAV accretion. The board has authorized a new $100 million stock repurchase plan, which will be utilized aggressively in combination with a 10b5-1 trading plan. The board declared a quarterly dividend of $0.31 per share, payable on March 26, 2026, which they believe is sustainable due to their earnings power and progress in reducing their cost of capital.

Valuation and Outlook

With a P/B Ratio of 0.73, the company's shares are trading at a discount to their book value. The Dividend Yield is 14.62%, indicating an attractive income generation opportunity. Analysts estimate next year's revenue growth at -6.9%. The company's efforts to mitigate the effects of lower base rates and current spread environment, including reducing their CLO and revolver costs, will be crucial in maintaining their dividend payout.

Portfolio Credit Quality

The company attributed their software exposure's below-average leverage of 4.5 to their focus on financing companies with embedded consistency in their performance. They emphasized that 90% of their software names have financial covenants, providing an additional layer of protection. The company's seasoning of the portfolio and increase in rates have affected certain credits, which often have idiosyncratic issues compounded by pockets of stress in the market.

3. NewsRoom

Card image cap

Brokerages Set MidCap Financial Investment Corporation (NASDAQ:MFIC) Price Target at $12.75

Mar -05

Source: defenseworld.net

Card image cap

MidCap Financial's Large Discount To NAV And Double-Digit Dividend Yield

Mar -03

Source: seekingalpha.com

Card image cap

MidCap Financial Investment Q4 Earnings Call Highlights

Mar -02

Source: defenseworld.net

Card image cap

MidCap Financial: Limited Portfolio Growth And Continued NAV Decline (Rating Downgrade)

Mar -02

Source: seekingalpha.com

Card image cap

MidCap Financial Investment Corporation (MFIC) Q4 2025 Earnings Call Transcript

Feb -27

Source: seekingalpha.com

Card image cap

MidCap Financial Investment (MFIC) Tops Q4 Earnings Estimates

Feb -26

Source: zacks.com

Card image cap

The ABCs Of BDC Risk

Feb -23

Source: seekingalpha.com

Card image cap

Buy Any Of January's 6 Ideal 'Safer' Dividend Power Dogs

Jan -17

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.20%)

6. Segments

Investment and Related Activities

Expected Growth: 10.2%

MidCap Financial Investment Corporation's Investment and Related Activities segment is poised for growth driven by increasing demand for financing solutions among middle-market companies, expansion into new markets, and a strong pipeline of investment opportunities.

7. Detailed Products

Senior Debt Financing

MidCap Financial Investment Corporation provides senior debt financing to middle-market companies, offering flexible and customized financing solutions to meet their unique needs.

Unitranche Debt Financing

MidCap Financial offers unitranche debt financing, a hybrid of senior and subordinated debt, providing a single, integrated financing solution for middle-market companies.

Second Lien Debt Financing

MidCap Financial provides second lien debt financing, offering subordinated debt financing solutions to middle-market companies, providing additional capital for growth and expansion.

Equity Co-Investments

MidCap Financial makes equity co-investments alongside private equity sponsors, providing additional capital and support for middle-market companies.

Asset-Based Financing

MidCap Financial offers asset-based financing solutions, providing financing secured by a company's assets, such as accounts receivable, inventory, and equipment.

8. MidCap Financial Investment Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

MidCap Financial Investment Corporation operates in a niche market, providing specialized financial services. While there are some substitutes available, they are not as comprehensive as the services offered by MidCap. Therefore, the threat of substitutes is moderate.

Bargaining Power Of Customers

MidCap Financial Investment Corporation's customers are primarily institutional investors and high net worth individuals. They have limited bargaining power due to the specialized nature of MidCap's services and the lack of alternative providers.

Bargaining Power Of Suppliers

MidCap Financial Investment Corporation's suppliers are primarily financial institutions and other service providers. They have limited bargaining power due to the competitive nature of the financial services industry and the availability of alternative suppliers.

Threat Of New Entrants

The financial services industry is highly regulated, and new entrants face significant barriers to entry. MidCap Financial Investment Corporation's specialized services and established reputation also make it difficult for new entrants to compete.

Intensity Of Rivalry

The financial services industry is highly competitive, and MidCap Financial Investment Corporation faces competition from other financial institutions and investment firms. However, MidCap's specialized services and strong reputation help to differentiate it from its competitors.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 59.26%
Debt Cost 7.13%
Equity Weight 40.74%
Equity Cost 11.37%
WACC 8.86%
Leverage 145.45%

11. Quality Control: MidCap Financial Investment Corporation passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Tortoise Energy Infrastructure

A-Score: 7.4/10

Value: 4.6

Growth: 6.6

Quality: 7.6

Yield: 10.0

Momentum: 6.0

Volatility: 9.7

1-Year Total Return ->

View Full Report
Stock-Card
SLR Investment

A-Score: 7.3/10

Value: 6.4

Growth: 6.6

Quality: 6.3

Yield: 10.0

Momentum: 4.5

Volatility: 10.0

1-Year Total Return ->

View Full Report
Stock-Card
PennantPark Floating Rate Capital

A-Score: 7.2/10

Value: 7.1

Growth: 4.9

Quality: 8.1

Yield: 10.0

Momentum: 3.0

Volatility: 10.0

1-Year Total Return ->

View Full Report
Stock-Card
MidCap Financial

A-Score: 6.5/10

Value: 5.1

Growth: 5.4

Quality: 5.4

Yield: 10.0

Momentum: 3.5

Volatility: 9.7

1-Year Total Return ->

View Full Report
Stock-Card
WhiteHorse Finance

A-Score: 6.3/10

Value: 8.3

Growth: 3.6

Quality: 6.4

Yield: 10.0

Momentum: 1.5

Volatility: 8.0

1-Year Total Return ->

View Full Report
Stock-Card
Eagle Point Credit Company

A-Score: 5.7/10

Value: 5.4

Growth: 4.2

Quality: 6.8

Yield: 10.0

Momentum: 0.5

Volatility: 7.3

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

11.71$

Current Price

11.71$

Potential

-0.00%

Expected Cash-Flows