Main Street Capital Corporation’s MAIN first-quarter 2021 net investment income of 58 cents per share surpassed the Zacks Consensus Estimate of 55 cents. Also, the bottom line rose 2% from the year-ago figure.

Results benefited from higher total investment income. Also, the liquidity position remained strong in the quarter. However, rise in operating expenses posed a headwind.

Distributable net investment income was $42.1 million, up 7% from the prior-year quarter.

Total Investment Income Increases, Expenses Rise

Total investment income was $62.8 million, up 12% from the year-ago quarter. Higher dividend income resulted in the upside. The top line also beat the Zacks Consensus Estimate of $58.7 million.

Total expenses increased 18% year over year to $23.1 million. Higher compensation led to the rise.

Strong Balance Sheet Position

As of Mar 31, 2021, Main Street’s net asset value was $22.65 per share compared with $22.35 on Dec 31, 2020.

As of Mar 31, 2021, the company had $65 million in cash and cash equivalents, $693 million of unused capacity under credit facility, with which it seeks to support investment and operating activities. Also, it had $60 million of remaining SBIC debenture capacity.

Our Take

Steady improvements in total investment income and strong origination volume are anticipated to support the company’s bottom line. Moreover, strong liquidity position keeps it well poised for growth. However, elevated costs remain a concern.

Main Street Capital Corporation Price, Consensus and EPS Surprise

Main Street Capital Corporation price-consensus-eps-surprise-chart | Main Street Capital Corporation Quote

Currently, Main Street carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Finance Stocks

Ares Capital Corporation’s ARCC first-quarter 2021 core earnings of 43 cents per share surpassed the Zacks Consensus Estimate of 42 cents. Moreover, the bottom line reflects a rise of 4.9% from the prior-year quarter’s reported number.

Hercules Capital Inc.’s HTGC first-quarter 2021 net investment income of 30 cents per share beat the Zacks Consensus Estimate by a penny. However, the bottom line declined 18.9% year over year.

TriplePoint Venture Growth BDC Corp. TPVG first-quarter 2021 net investment income was came in at 29 cents per share. The bottom line plunged 29.3% from the year-ago quarter.

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