Stellus Capital: The 12% Yield Could Be At Risk (Rating Downgrade)
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Stellus Capital Investment's dividend pay-out ratio has reached 100% in Q3, raising concerns about dividend sustainability. The increase in non-accruals and realized losses has led to a downgrade from 'Buy' to 'Hold'.
December 03, 2024 | 4:30 am
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NEGATIVE IMPACT
Stellus Capital Investment's dividend pay-out ratio has reached 100%, increasing the risk of dividend cuts. The rise in non-accruals to 4.7% and higher realized losses have led to a downgrade from 'Buy' to 'Hold'.
The 100% dividend pay-out ratio indicates no margin for error, increasing the likelihood of a dividend cut. The rise in non-accruals and realized losses further exacerbates the risk, justifying the downgrade to 'Hold'.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100