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1. Company Snapshot

1.a. Company Description

Fidus Investment Corporation is a business development company.It specializing in leveraged buyouts, refinancings, change of ownership transactions, recapitalizations, strategic acquisitions, mezzanine, growth capital, business expansion, lower middle market investments, debt investments, subordinated and second lien loans, senior secured and unitranche debt, preferred equity, warrants, subordinated debt, senior subordinated notes, junior secured loans, and unitranche loans.It does not invest in turnarounds or distressed situations.


The fund prefers to invest in aerospace and defense, business services, consumer products and services including retail, food, and beverage, healthcare products and services, industrial products and services, information technology services, niche manufacturing, transportation and logistics, and value-added distribution sectors.It seeks to invest in companies based in United States.The fund typically invests between $5 million and $15 million per transaction in companies with annual revenues between $10 million and $150 million and an annual EBITDA between $3 million and $20 million, but it can occasionally invest in larger or smaller companies.


It seeks to acquire minority equity stakes and board observation rights in conjunction with its investments.

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1.b. Last Insights on FDUS

The recent 3-month performance of Fidus Investment Corporation was negatively impacted by a drop in SOFR, temporary income dilution from share issuance, and an excise tax charge, which led to a decline in Q4 adjusted net income to $0.54. Additionally, the company's Q1 2025 earnings call transcript revealed a flat Q1 adjusted net investment income of $0.54, with a stable NAV and a managed dividend policy ensuring 100% coverage.

1.c. Company Highlights

2. Fidus Investment Corporation Delivers Solid Q3 Earnings

Fidus Investment Corporation reported a strong financial performance in the third quarter of 2025, with adjusted Net Investment Income (NII) of $0.50 per share, exceeding the base dividend of $0.43 per share. The company's debt portfolio continued to perform well, generating a weighted average effective yield on debt investments of 13%. Total investment income was $37.3 million for the quarter, a $2.7 million decrease from Q2. Earnings per share (EPS) came in at $0.5, in line with analyst estimates. The company's net debt-to-equity ratio stood at 0.7x as of September 30, 2025.

Publication Date: Nov -21

📋 Highlights
  • Adjusted NII Exceeds Base Dividend:: Generated $0.50 per share in adjusted NII, surpassing the base dividend of $0.43 per share.
  • Weighted Average Effective Yield:: Maintained a 13% effective yield on debt investments, reflecting strong portfolio returns.
  • Net Debt-to-Equity Ratio:: Ended Q3 with a net debt-to-equity ratio of 0.7x, indicating balanced leverage.
  • Liquidity Resources:: Total liquidity of $203.8 million, including $62.3 million cash and $125 million credit line availability.
  • Debt Refinancing & Expansion:: Completed a $100 million add-on to 6.75% notes and upsized the line of credit to $175 million, extending maturity to 2030.

Portfolio Performance and Credit Quality

The company's portfolio remains healthy from a credit quality perspective. Fidus continued to build its portfolio primarily by supporting its portfolio companies with growth capital. The management team highlighted that M&A activity picked up in the third quarter, contributing to the company's investment income. As Ed Ross, Chairman and CEO, noted, "we continued to build our portfolio primarily by supporting our portfolio companies with growth capital."

Liquidity and Capital Resources

Fidus ended Q3 with $543.8 million of debt outstanding and liquidity and capital resources, including cash, availability on its line of credit, and available SBA debentures, totaling approximately $203.8 million. The company completed a $100 million debt add-on to its 6.75% notes due in March 2030 and refinanced its line of credit, upsizing it to $175 million. This move has enhanced the company's flexibility from a capitalization and liquidity perspective.

Outlook and Valuation

Looking ahead, Fidus expects decent market activity in the fourth quarter, driven by a robust pipeline of potential investments. Analysts estimate revenue growth of 4.5% for the next year. With a dividend yield of 11.88% and a P/B ratio of 0.96, the stock appears to offer an attractive income stream. The current valuation metrics suggest that the market has priced in a reasonable expectation of the company's future performance.

3. NewsRoom

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Why I'm Parking 45% Of My BDC Capital In These 2 Names

Dec -02

Source: seekingalpha.com

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Don't Fear The Pivot: 2 BDCs Built For 10%+ Yields In New Rate Regime

Nov -26

Source: seekingalpha.com

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Don't Bury BDC Dividends Just Yet

Nov -17

Source: seekingalpha.com

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The BDC Bargain Bell Is Ringing

Nov -13

Source: seekingalpha.com

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Fidus Investment: Double Digit Yield That Fits In Retirement Portfolios

Nov -11

Source: seekingalpha.com

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Fidus Investment: Q3 Earnings Reinforce Portfolio Resilience

Nov -08

Source: seekingalpha.com

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Fidus Investment (FDUS) Q3 2025 Earnings Call Transcript

Nov -07

Source: seekingalpha.com

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Fidus Investment (FDUS) Q3 Earnings Meet Estimates

Nov -07

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.30%)

6. Segments

Investment and Related Activities

Expected Growth: 10.3%

Fidus Investment Corporation's lower middle-market focus and diversified debt investments and equity co-investments drive growth, with increasing demand for capital from small businesses and a favorable interest rate environment.

7. Detailed Products

Fixed Income Securities

Fidus Investment Corporation offers a range of fixed income securities, including bonds, notes, and commercial paper, providing investors with a stable source of income.

Equity Investments

Fidus Investment Corporation provides equity investment opportunities in publicly traded companies, offering investors a potential for long-term growth.

Structured Products

Fidus Investment Corporation offers structured products, including derivatives and other customized investment solutions, to help investors manage risk and achieve specific investment objectives.

Real Assets

Fidus Investment Corporation provides investment opportunities in real assets, including real estate, infrastructure, and natural resources, offering investors a diversification benefit and potential for income generation.

Private Debt

Fidus Investment Corporation offers private debt investment opportunities, providing investors with a potential source of income and diversification benefits.

8. Fidus Investment Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Fidus Investment Corporation is moderate due to the presence of alternative investment options available to clients.

Bargaining Power Of Customers

The bargaining power of customers is low for Fidus Investment Corporation as clients have limited negotiating power due to the company's specialized investment services.

Bargaining Power Of Suppliers

The bargaining power of suppliers is moderate for Fidus Investment Corporation as the company relies on a diverse range of suppliers for its operations.

Threat Of New Entrants

The threat of new entrants is high for Fidus Investment Corporation due to the relatively low barriers to entry in the investment industry.

Intensity Of Rivalry

The intensity of rivalry is high for Fidus Investment Corporation due to the presence of several established players in the investment industry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 44.18%
Debt Cost 5.05%
Equity Weight 55.82%
Equity Cost 10.93%
WACC 8.33%
Leverage 79.14%

11. Quality Control: Fidus Investment Corporation passed 4 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

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Central Securities

A-Score: 7.3/10

Value: 4.8

Growth: 4.6

Quality: 8.5

Yield: 9.0

Momentum: 7.0

Volatility: 10.0

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PennantPark

A-Score: 6.8/10

Value: 7.0

Growth: 3.2

Quality: 7.0

Yield: 10.0

Momentum: 4.0

Volatility: 9.7

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Fidus

A-Score: 6.8/10

Value: 3.5

Growth: 3.9

Quality: 7.3

Yield: 10.0

Momentum: 6.0

Volatility: 10.0

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Capital Southwest

A-Score: 6.6/10

Value: 5.8

Growth: 3.2

Quality: 7.7

Yield: 10.0

Momentum: 3.0

Volatility: 9.7

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Goldman Sachs BDC

A-Score: 6.4/10

Value: 6.5

Growth: 4.3

Quality: 6.4

Yield: 10.0

Momentum: 1.5

Volatility: 9.7

1-Year Total Return ->

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Rand Capital

A-Score: 5.6/10

Value: 7.8

Growth: 5.6

Quality: 3.8

Yield: 10.0

Momentum: 2.0

Volatility: 4.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

19.75$

Current Price

19.75$

Potential

-0.00%

Expected Cash-Flows