FDUS: 10.6% Yielding BDC Trading Below Book Value

Summary

  • FDUS has outperformed most BDCs when it comes to NAV per share growth, but declined during the recent quarter with realized losses mostly due to the exits of two investments.
  • FDUS is for higher risk investors (looking for higher yields) and does not fit my personal risk profile due to its portfolio of mostly second-lien/subordinated debt and equity investments.
  • However, these investments are responsible for most of the historical realized gains, NAV per share growth, and special dividends.
  • The stock is likely under-priced and trading 9% below book value, giving it a current regular dividend yield of 10.6% (before specials).

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