This Stock Has A 10.12% Yield, Sells For Less Than Book, and Insiders Have Been Buying

In this series, we look through the most recent Dividend Channel ''DividendRank'' report, and then we cherry pick only those companies that have experienced insider buying within the past six months. The officers and directors of a company tend to have a unique insider's view of the business, and presumably the only reason an insider would choose to take their hard-earned cash and use it to buy stock in the open market, is that they expect to make money — maybe they find the stock very undervalued, or maybe they see exciting progress within the company, or maybe both. So when stocks turn up that see insider buying, and are also top ranked, investors are wise to take notice. One such company is Gladstone Capital Corporation (GLAD), which saw buying by President Robert L. Marcotte.

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The Top DividendRank'ed Stocks With Insider Buying »

Back on December 10, Marcotte invested $119,192.74 into 13,700 shares of GLAD, for a cost per share of $8.70. In trading on Thursday, bargain hunters could buy shares of Gladstone Capital Corporation ( GLAD) and achieve a cost basis 4.5% cheaper than Marcotte, with shares changing hands as low as $8.31 per share. It should be noted that Marcotte has collected $0.07/share in dividends since the time of their purchase, so they are currently down 3.7% on their purchase from a total return basis. Gladstone Capital Corporation shares are currently trading +4.90% on the day. The chart below shows the one year performance of GLAD shares, versus its 200 day moving average:

Gladstone Capital Corporation Chart

Looking at the chart above, GLAD's low point in its 52 week range is $8.02 per share, with $10.37 as the 52 week high point — that compares with a last trade of $8.71. By comparison, below is a table showing the prices at which insider buying was recorded over the last six months:

Purchased Insider Title Shares Price/Share Value
08/05/2014 Robert L. Marcotte President 11,400 $9.51 $108,414.00
08/06/2014 Robert L. Marcotte President 8,401 $9.62 $80,817.62
08/07/2014 Robert L. Marcotte President 10,000 $9.69 $96,900.00
08/08/2014 Robert L. Marcotte President 10,000 $9.74 $97,360.00
09/04/2014 Melissa Morrison Chief Financial Officer 125 $9.69 $1,211.25
12/09/2014 Robert L. Marcotte President 1,300 $8.66 $11,252.98
12/10/2014 Robert L. Marcotte President 13,700 $8.70 $119,192.74

The DividendRank report noted that among the coverage universe, GLAD shares displayed both attractive valuation metrics and strong profitability metrics. For example, the recent GLAD share price of $8.30 represents a price-to-book ratio of 0.9 and an annual dividend yield of 10.12% — by comparison, the average company in Dividend Channel's coverage universe yields 4.3% and trades at a price-to-book ratio of 1.9. The report also cited the strong monthly dividend history at Gladstone Capital Corporation, and favorable long-term multi-year growth rates in key fundamental data points.

The report stated, '' Dividend investors approaching investing from a value standpoint are generally most interested in researching the strongest most profitable companies, that also happen to be trading at an attractive valuation. That's what we aim to find using our proprietary DividendRank formula, which ranks the coverage universe based upon our various criteria for both profitability and valuation, to generate a list of the top most 'interesting' stocks, meant for investors as a source of ideas that merit further research.''

The annualized dividend paid by Gladstone Capital Corporation is $0.84/share, currently paid in monthly installments, and its most recent dividend ex-date was on 12/17/2014. Below is a long-term dividend history chart for GLAD, which the report stressed as being of key importance. Indeed, studying a company's past dividend history can be of good help in judging whether the most recent dividend is likely to continue.

GLAD+Dividend+History+Chart

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