Main Street Capital Corporation’s MAIN fourth-quarter 2024 adjusted net investment income of $1.02 per share missed the Zacks Consensus Estimate of $1.08. The reported figure compares unfavorably with $1.07 per share in the year-ago quarter.

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The results were primarily affected by an increase in expenses. Nonetheless, an improvement in the total investment income and the company’s robust portfolio activities supported the results to some extent.

Distributable net investment income (GAAP basis) was $95.3 million, up 1% from the prior-year quarter.

For 2024, adjusted net investment income of $4.09 per share compares unfavorably with $4.14 per share in the year-ago period. Distributable net investment income was $374.9 million, up 5.1% from the prior-year quarter.

MAIN’s Total Investment Income Improves, Expenses Rise

Fourth-quarter total investment income was $140.4 million, up 9% year over year. The rise was driven by an increase in interest income, dividend income and fee income. However, the top line missed the Zacks Consensus Estimate by 0.7%.

For 2024, total investment income was $541 million, up 8.1% year over year.

Fourth-quarter total expenses were $50.1 million, up 27.9% year over year. The increase was due to a rise in all the components of expenses.

Portfolio Activities for Main Street Capital

In the fourth quarter, the company invested $167.6 million in its lower middle market (LMM) portfolio. Of this amount, $115.8 million was invested in new portfolio companies. In comparison, the total LMM portfolio investment in the year-ago quarter was $92.3 million.

Main Street Capital completed $108 million in total private loan portfolio investments, down significantly from $160.4 million in the prior-year quarter.
The net decrease in the total cost basis of the middle market investment portfolio was $25.2 million, down 49.9% year over year.

Main Street Capital’s Balance Sheet Position

As of Dec. 31, 2024, the company’s cash and cash equivalents totaled $78.3 million, which declined from $84.4 million as of Sept. 30, 2024.

The company has an aggregate unused capacity of $1.33 billion under its corporate revolving credit facility, up 6.4% from the prior quarter.

As of Dec. 31, 2024, total assets were $5.1 billion, up 0.5% from the previous quarter.

Net asset value was $31.65 per share, up from $30.57 as of Sept. 30, 2024.

Our Take on MAIN

Growth in total investment income is expected to persist in the coming quarters, driven by increased demand for customized financing. Higher investment commitments are anticipated to continue boosting the company’s financial performance. However, an escalated expense base is a near-term concern.

Main Street Capital Corporation Price, Consensus and EPS Surprise

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

Main Street Capital currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy)  stocks here.

Performance of Other REITs

Annaly Capital Management, Inc. NLY reported fourth-quarter 2024 adjusted earnings available for distribution per average share of 72 cents, which beat the Zacks Consensus Estimate of 67 cents. The figure increased from 68 cents in the year-ago quarter.

NLY recorded a year-over-year decline in book value per share. Nonetheless, the company’s average yield on interest-earning assets improved in the reported quarter.

AGNC Investment Corp.’s AGNC fourth-quarter 2024 net spread and dollar roll income per common share (excluding estimated "catch-up" premium amortization benefit) of 37 cents missed the Zacks Consensus Estimate of 42 cents. Also, the bottom line declined from 60 cents in the year-ago quarter.

As of Dec. 31, 2024, tangible net book value per common share was $8.41, down 3.3% on a year-over-year basis. As of Dec. 31, 2024, AGNC’s average tangible net book value "at risk" leverage ratio was 7.2X, down from 7.4X from the prior-year quarter.

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This article originally published on Zacks Investment Research (zacks.com).

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