This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Fifth Street Finance Corp. Releases Its December 2013 Newsletter: Expects Earnings To Meet Or Exceed The Dividend

Stocks in this article: FSC

WHITE PLAINS, NY, Dec. 19, 2013 (GLOBE NEWSWIRE) -- Fifth Street Finance Corp. (Nasdaq:FSC) ("FSC") released its December 2013 newsletter today.

At FSC, we are using our sponsor relationships and investment expertise to make prudent investments with attractive risk-adjusted returns in a market characterized by compressing debt yields and increasing leverage multiples. We believe that continuing to focus on safer unitranche loans to larger borrowers is the right way to manage risk. However, this risk profile led to a lower weighted average yield on debt investments, and in turn, a lower net investment income per share. As a result, FSC's Board of Directors recently decided to lower the dividend per share to a level more consistent with current net investment income per share.

The decision to reduce the dividend was based on the view that near-term growth in earnings would be unlikely to close the previous gap between net investment income per share and the dividend that occurred over recent past quarters. The dividend change was not due to expectations for lower near-term earnings per share compared to prior levels. Previously anticipated growth in net investment income per share is now more likely expected to occur several quarters in the future. This was a result of the economic environment and our initiatives to improve earnings taking time to develop.

The team at FSC is focused on generating net investment income per share that exceeds the current dividend level. This should be achievable given that FSC's weighted average yield on debt investments has stabilized, leverage is maintained near the target range and multiple initiatives previously discussed are underway to grow net investment income per share.

Early in FSC's history as a public company, it was able to grow net investment income per share and the dividend per share by deploying capital at the right time. We are optimistic that success in our initiatives to grow earnings per share combined with our positioning in the current cycle should enable us to grow net investment income per share, and ideally the dividend per share, in the future.

1 of 3

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs