GICS Sector : Financial Services
Bain Capital Specialty Finance, Inc.is business development company specializing in direct loans to middle-market companies.The fund seeks to invest in senior investments with a first or second lien on collateral, senior first lien, stretch senior, senior second lien, unitranche, mezzanine debt, junior securities, other junior investments, and secondary purchases of assets or portfolios that primarily consist of middle-market corporate debt.
Bain Capital Specialty Finance reported a net investment income per share of $0.45 for Q3, representing an annualized yield on book value of 10.3%. Earnings per share were $0.29, reflecting an annualized return on book value of 6.6%. The company's net asset value per share was $17.40, a decline of $0.16 per share from the prior quarter end. Total investment income was $67.2 million, a decrease from $71 million in the previous quarter, primarily driven by lower activity levels. Net investment income for the quarter was $29.2 million or $0.45 per share.
Publication Date: Nov -26
The company's private credit group continues to curate a strong pipeline of lending opportunities in the core middle market, with gross originations of $340 million in Q3. The portfolio is highly diversified across 195 portfolio companies operating in 31 different industries, primarily consisting of investments in first lien senior secured loans. As of September 30, the size of the portfolio at fair value was approximately $2.5 billion.
Michael Ewald mentioned that the company remains disciplined on terms and structure in its segment of the market, with a weighted average spread on originations to new companies of approximately 550 basis points and weighted average leverage of 4.5 times. The company's processes include deploying third-party legal advisers to perform legal due diligence and seeking to ensure that borrowers have reputable auditors and quality of earnings providers.
The company believes it can maintain its regular $0.42 per share dividend in the current environment. At the current market price, the dividend yield, inclusive of the regular and special dividend for Q4, represents a 13% annualized yield. With a P/E Ratio of 8.59 and a Dividend Yield of 12.68%, the stock appears to be attractively valued. The Price-to-Book Ratio of 0.82 suggests that the stock is trading at a discount to its book value.
Amit Joshi mentioned that the company's earnings would be lower without the look-back, but with the incentive fee coming back in, it would add 60-70 basis points to return on equity (ROE). The company has different levers to pull, including refinancing debt and spillover income, which would keep them above the regular dividend. With a ROE of 9.42% and a Net Debt / EBITDA ratio of -1.51, the company's financial health appears to be robust.
Bain Capital Specialty Finance: 11.7% Dividend Yield And 17.6% Discount To NAV
Dec -02
Bain Capital Specialty Finance, Inc. (BCSF) Q3 2025 Earnings Call Transcript
Nov -11
BCSF Reports Earnings
Nov -11
Bain Capital Specialty Finance, Inc. Announces September 30, 2025 Financial Results and Declares Fourth Quarter 2025 Dividend of $0.42 per Share
Nov -10
Bain Capital Specialty Finance, Inc. Schedules Earnings Release for the Third Quarter Ended September 30, 2025
Oct -28
Can Bain Capital Specialty Finance Weather BDC Headwinds?
Oct -13
Bain Capital Specialty Finance: P/NAV Of 0.78x, Double-Digit Yield; This BDC Is A Hidden Gem (Rating Downgrade)
Oct -09
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Sep -24
Bain Capital Specialty Finance, Inc.'s 9.9% growth in Investment and Related Activities is driven by increasing demand for specialty finance solutions, expansion into new markets, and strategic investments in high-growth sectors. Additionally, the company's expertise in credit analysis and risk management has enabled it to capitalize on opportunities in the current market environment.
Bain Capital Specialty Finance provides senior secured loans to middle-market companies, offering flexible financing solutions to support growth, acquisitions, and recapitalizations.
Bain Capital Specialty Finance offers unitranche loans, which combine senior and subordinated debt into a single loan, providing a simplified and efficient financing solution.
Bain Capital Specialty Finance provides second lien loans, which offer additional financing to companies with existing senior debt, providing access to capital for growth initiatives.
Bain Capital Specialty Finance participates in equity co-investments alongside private equity sponsors, providing additional capital to support portfolio company growth.
Bain Capital Specialty Finance offers asset-based loans, which provide financing secured by a company's assets, such as inventory, accounts receivable, or equipment.
The threat of substitutes for Bain Capital Specialty Finance, Inc. is medium due to the availability of alternative financing options for borrowers.
The bargaining power of customers is low as they have limited negotiating power due to the specialized nature of the financing services provided by Bain Capital Specialty Finance, Inc.
The bargaining power of suppliers is medium as they have some negotiating power due to the specialized nature of the financing services provided by Bain Capital Specialty Finance, Inc.
The threat of new entrants is high due to the relatively low barriers to entry in the financing industry, and the potential for new players to disrupt the market.
The intensity of rivalry is high due to the competitive nature of the financing industry, with many established players competing for market share.
| Value | |
|---|---|
| Debt Weight | 52.50% |
| Debt Cost | 6.54% |
| Equity Weight | 47.50% |
| Equity Cost | 9.64% |
| WACC | 8.01% |
| Leverage | 110.51% |
Value: 5.7
Growth: 6.3
Quality: 8.1
Yield: 10.0
Momentum: 7.5
Volatility: 10.0
1-Year Total Return ->
Value: 7.2
Growth: 6.3
Quality: 8.0
Yield: 10.0
Momentum: 2.5
Volatility: 9.3
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Value: 6.5
Growth: 4.3
Quality: 7.1
Yield: 10.0
Momentum: 5.0
Volatility: 9.7
1-Year Total Return ->
Value: 7.0
Growth: 7.3
Quality: 6.2
Yield: 10.0
Momentum: 3.0
Volatility: 6.7
1-Year Total Return ->
Value: 5.3
Growth: 2.7
Quality: 7.0
Yield: 10.0
Momentum: 0.5
Volatility: 8.3
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Value: 6.4
Growth: 3.9
Quality: 3.3
Yield: 10.0
Momentum: 0.0
Volatility: 7.7
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