Stellus Capital Investment Corp Dossier
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SectorFinancials IndustryAsset Management & Custody Banks Beta (adjusted)0.78 Intrinsic Value $10.30median of 4 methods · middle span $10-$10based on filings through 30 Jun 2026 Market Price $7.47Price as of 1 Oct 2026 UndervaluedIntrinsic value is 38% above the market price −50% · IV below pricenear fair value ±15%IV above price · +50% Data confidence Sign in to view data confidence Market Cap $212.7M Enterprise Value $854.4M Shares Outstanding 29.3M diluted Next Earnings Date16 Nov 2026 Last ex-dividend31 Jul 2026 All prices and values are periodic snapshots, not live quotes. Source dates are shown for reference. ThesisStreet consensus, scenarios, merits, risks, and invalidation triggers Thesis Summary Stellus Capital Investment Corp (SCM) is a business development company (BDC) focused on lower middle-market private companies. While SCM offers an attractive dividend yield, recent performance has been mixed. In Q1 2026, core net investment income of $0.27 per share fell short of the $0.34 per share in declared distributions, leading to a decline in NAV per share to $12.54. Additionally, non-accrual loans have ticked up slightly to 5.2% of fair value. The pending acquisition of its external advisor, Stellus Capital Management, by P10 Inc. introduces transitional uncertainty, though day-to-day operations are expected to remain under current management. A Hold recommendation is warranted until credit quality stabilizes and the advisor transition is completed. This section is the 12-month view: analyst targets and the probability-weighted scenarios built from them. The intrinsic value at the top of this page answers a different question: what the business is worth today. Street view · analyst 12-month targets Low · most bearish analyst$8.00 Mean target$10.25 High · most bullish analyst$11.00 Our research · scenarios, merits, risks, and invalidation triggersResearch as of 19 Jun 2026 Scenarios · 12-month scenario targets Bear CaseDownside scenario Macroeconomic headwinds cause further credit deterioration, pushing non-accruals above 8% of fair value. NAV continues to erode due to unrealized depreciation, forcing a significant dividend cut that dampens investor sentiment and compresses the price-to-NAV multiple. Base CaseCentral scenario The portfolio remains stable around $970M to $990M with repayments matching new originations. Non-accrual loans are gradually resolved over 12-24 months, and the P10 acquisition of the advisor closes smoothly with unchanged advisory terms. Dividends are adjusted slightly downward to align with core net investment income. Bull CaseUpside scenario Stellus Capital Investment Corp's bull case is anchored by its highly defensive portfolio structure, where 99.3% of its loans are senior secured first-lien debt, providing strong recovery protection in the event of borrower defaults. Additionally, the portfolio maintains a high debt-yield of 14.2%, and management has authorized a $15 million share repurchase program to support shareholder value. The company also benefits from a highly experienced investment team with over 340 combined years of lower middle-market principal investing experience, focusing on stable, sponsor-backed private companies. Scenarios are anchored to street consensus at the research date, with our probabilities and rationale. Key Investment Merits
Key Investment Risks
Thesis Invalidation Triggers
All scenarios are estimates and subject to change. Past performance is not indicative of future results. Quality Pillars MembersThis section is available to registered members. Create a free account or sign in to unlock the full breakdown. Explore this dossierValuationIntrinsic value, the six-method breakdown, peer medians, and your assumptions sandbox.Financial SnapshotRevenue, profitability, returns, balance sheet, dividends, and the filing-level detail.Qualitative AnalysisBusiness overview, strategic initiatives, and mergers, acquisitions & partnerships.Outlook & Key DatesForward estimates, reporting calendar, and the monitoring framework. |