Download PDF

1. Company Snapshot

1.a. Company Description


It prefers to invest in ranging between $2 million and $75 million in equity investment and enterprise value in ranging between $3 million and $20 million.The firm typically prefers to invest in the range of $5 million and $50 million per transaction in debt investment value and in the range of $1 million and $20 million in annual EBITDA.The firm's middle market debt investments are made in businesses that are generally larger in size than its lower middle market portfolio companies.


It takes 5 percent minority and up to 50 percent majority equity investments.Main Street Capital Corporation was founded in 2007 and is based in Houston, Texas with an additional office in Chojnów, Poland.">

Main Street Capital Corporation is a business development company specializes in equity capital to lower middle market companies.The firm specializing in recapitalizations, management buyouts, refinancing, family estate planning, management buyouts, refinancing, industry consolidation, mature, later stage emerging growth.The firm also provides debt capital to middle market companies for acquisitions, management buyouts, growth financings, recapitalizations and refinancing.


The firm seeks to partner with entrepreneurs, business owners and management teams and generally provides "one stop" financing alternatives within its lower middle market portfolio.It prefers to invest in air freight and logistics, auto components, building products, chemicals, commercial services, computers, construction and engineering, consumer finance, consumer services, electronic equipment, energy equipment and services, financial services, health care equipment, health care providers, hotels, restaurants, and leisure, internet software and services, IT Services, machinery, oil, gas and consumable fuels, paper and forest products, professional and industrial services, road and rail, software, specialty retail, telecommunication, consumer discretionary, energy, materials, technology, and transportation.The firm typically invests in lower middle market companies generally with annual revenues between $5 million and $300 million.


It prefers to invest in ranging between $2 million and $75 million in equity investment and enterprise value in ranging between $3 million and $20 million.The firm typically prefers to invest in the range of $5 million and $50 million per transaction in debt investment value and in the range of $1 million and $20 million in annual EBITDA.The firm's middle market debt investments are made in businesses that are generally larger in size than its lower middle market portfolio companies.


It takes 5 percent minority and up to 50 percent majority equity investments.Main Street Capital Corporation was founded in 2007 and is based in Houston, Texas with an additional office in Chojnów, Poland.

Show Full description

1.b. Last Insights on MAIN

Main Street Capital Corporation faces rising risks due to increasing non-accruals and sector-wide credit risks. The company's non-accruals reached 5% of the portfolio by cost, mirroring levels at FS KKR Capital that triggered dividend reassessment. A potential cycle of Federal Reserve rate cuts and increasing credit stress poses risks to BDCs, including Main Street Capital. Additionally, the company's high valuation, trading at nearly double book value, may be a concern. Despite strong dividend coverage and NAV growth, the premium to NAV remains historically high.

1.c. Company Highlights

2. Main Street Capital Corporation Delivers Strong Q3 2025 Results

Main Street Capital Corporation reported a robust financial performance in the third quarter of 2025, with total investment income reaching $139.8 million, a $3 million increase from the second quarter. The company's net investment income (NII) came in at $43.9 million, and distributable net investment income (DNII) per share drove an annualized return on equity of 17%. Earnings per share (EPS) was $0.97, slightly below analyst estimates of $1.04. The net asset value (NAV) per share hit a record $32.78, increasing by $0.48 from the second quarter and $2.21 from a year ago, primarily due to net fair value increases in its lower middle market and private loan investment portfolios.

Publication Date: Nov -16

📋 Highlights
  • Annualized ROE and NAV Growth:: Achieved 17% annualized return on equity (ROE) and a record NAV of $32.78/share, up $2.21 from a year ago.
  • Net Investment Income:: Q3 net investment income was $43.9M, with interest income down $7.3M YoY but dividend income up $8M YoY.
  • Dividend Increases:: Declared $0.30 supplemental dividend (payable in Dec) and raised Q1 2026 regular dividends to $0.26/share (+4% YoY).
  • Capital Structure Strength:: Regulatory leverage at 0.62x debt-to-equity and 2.61x asset coverage, supported by $350M in new unsecured notes issuance.
  • Investment Pipeline and Guidance:: Above-average lower middle market pipeline, expecting Q4 2025 NII of ≥$1.05/share before taxes.

Investment Portfolio Performance

The lower middle market portfolio generated $106 million in investments, with a net increase of $61 million, while private loan investments decreased by $69 million. The company's investment pipeline is above average, particularly in the private loan portfolio, and expects strong investment activity in the fourth quarter. The improvement in credit quality is a positive sign, and the company is well-positioned to continue growing its asset management business.

Asset Management Business

Main Street's asset management business continued to produce positive results, with significant incentive fee income and base management fees. The company's capital structure remains strong, with a conservative leverage profile and a liquidity position that supports continued growth of its investment portfolio. The regulatory debt-to-equity leverage was 0.62x, and the regulatory asset coverage ratio was 2.61x, indicating a healthy balance sheet.

Valuation and Dividend

With a Price-to-Book Ratio (P/B) of 1.78 and a Dividend Yield of 7.22%, the stock appears to be attractively valued. The company's decision to declare a supplemental dividend of $0.30 per share payable in December and increase its regular monthly dividends for the first quarter of 2026 to $0.26 per share, representing a 4% increase from the first quarter of 2025, is a positive sign for income-seeking investors. Analysts estimate revenue growth of 1.9% for next year, and the company's guidance for fourth-quarter 2025 net investment income before taxes of at least $1.05 per share provides a positive outlook.

Outlook and Expectations

The company's strong investment pipeline and improving credit quality position it for continued growth in 2026. With a robust asset management business and a healthy balance sheet, Main Street Capital Corporation is well-positioned to capitalize on opportunities in the lower middle market and private loan portfolios. As the company continues to execute on its strategy, investors can expect a stable source of income and potential long-term capital appreciation.

3. NewsRoom

Card image cap

How to Build a Portfolio That Pays You Every Month

Dec -03

Source: 247wallst.com

Card image cap

Main Street Announces Follow-On Investment

Dec -02

Source: prnewswire.com

Card image cap

Main Street Capital: What Bubble?

Nov -26

Source: seekingalpha.com

Card image cap

Advisors Asset Management Inc. Boosts Stock Holdings in Main Street Capital Corporation $MAIN

Nov -26

Source: defenseworld.net

Card image cap

A Rare Buying Opportunity: Blue-Chip 11-12% Yields Too Cheap To Ignore

Nov -24

Source: seekingalpha.com

Card image cap

Worried About Rate Cuts? 2 BDCs Best Positioned For The Storm

Nov -23

Source: seekingalpha.com

Card image cap

5 Passive Income Monthly Pay Dividend All-Stars Every Boomer Should Own

Nov -21

Source: 247wallst.com

Card image cap

Main Street Announces New Portfolio Investment

Nov -19

Source: prnewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (9.90%)

6. Segments

Investment and Related Activities

Expected Growth: 9.9%

Main Street Capital Corporation's 9.9% growth in Investment and Related Activities is driven by a strong pipeline of new investments, increased portfolio company earnings, and a favorable interest rate environment. Additionally, the company's strategic investments in lower middle market businesses and its ability to provide customized financing solutions have contributed to its growth.

7. Detailed Products

Lower Middle Market Portfolio

Provides debt and equity financing to lower middle market companies with annual revenues between $10 million and $150 million.

Private Loan Portfolio

Offers debt financing to private equity-sponsored companies with annual revenues between $10 million and $500 million.

Middle Market Portfolio

Provides debt and equity financing to middle market companies with annual revenues between $150 million and $500 million.

Asset Management

Manages investments in debt and equity securities of middle market companies.

Investment Funds

Manages investment funds focused on debt and equity investments in middle market companies.

8. Main Street Capital Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Main Street Capital Corporation is medium, as there are some alternative investment options available to investors, but they may not offer the same level of diversification and income generation as Main Street's investment portfolio.

Bargaining Power Of Customers

The bargaining power of customers for Main Street Capital Corporation is low, as investors have limited negotiating power and are largely dependent on the company's investment offerings.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Main Street Capital Corporation is medium, as the company relies on a diverse range of investment managers and advisors, but may still be subject to some level of negotiation and pricing pressure.

Threat Of New Entrants

The threat of new entrants for Main Street Capital Corporation is high, as the investment management industry is highly competitive and new entrants may be able to offer innovative products and services that compete with Main Street's offerings.

Intensity Of Rivalry

The intensity of rivalry for Main Street Capital Corporation is high, as the investment management industry is highly competitive and companies must continually innovate and differentiate themselves to attract and retain investors.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 42.13%
Debt Cost 5.95%
Equity Weight 57.87%
Equity Cost 10.18%
WACC 8.40%
Leverage 72.79%

11. Quality Control: Main Street Capital Corporation passed 6 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
Main Street Capital

A-Score: 7.5/10

Value: 4.8

Growth: 6.0

Quality: 7.6

Yield: 9.0

Momentum: 8.0

Volatility: 9.3

1-Year Total Return ->

View Full Report
Stock-Card
Ares Capital

A-Score: 7.3/10

Value: 6.7

Growth: 5.1

Quality: 8.0

Yield: 10.0

Momentum: 4.0

Volatility: 10.0

1-Year Total Return ->

View Full Report
Stock-Card
Golub Capital BDC

A-Score: 7.1/10

Value: 6.7

Growth: 5.8

Quality: 7.9

Yield: 10.0

Momentum: 2.5

Volatility: 10.0

1-Year Total Return ->

View Full Report
Stock-Card
Hercules Capital

A-Score: 6.7/10

Value: 6.0

Growth: 3.6

Quality: 6.8

Yield: 10.0

Momentum: 4.0

Volatility: 9.7

1-Year Total Return ->

View Full Report
Stock-Card
Victory Capital Holdings

A-Score: 6.4/10

Value: 4.7

Growth: 6.7

Quality: 8.4

Yield: 6.0

Momentum: 6.0

Volatility: 6.7

1-Year Total Return ->

View Full Report
Stock-Card
Corebridge Financial

A-Score: 5.6/10

Value: 6.0

Growth: 3.3

Quality: 3.2

Yield: 8.0

Momentum: 6.0

Volatility: 7.0

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

60.73$

Current Price

60.73$

Potential

-0.00%

Expected Cash-Flows