Palmer Square Capital BDC (NYSE:PSBD) Releases Earnings Results, Beats Expectations By $0.06 EPS

Palmer Square Capital BDC (NYSE:PSBD) issued its quarterly earnings results on Wednesday. The company reported $0.46 EPS for the quarter, beating the consensus estimate of $0.40 by $0.06, FiscalAI reports. Palmer Square Capital BDC had a positive return on equity of 11.22% and a negative net margin of 26.73%. The firm had revenue of $26.57 million during the quarter, compared to analysts’ expectations of $26.69 million.

Here are the key takeaways from Palmer Square Capital BDC’s conference call:

• Third-quarter net investment income fell to $0.38 per share from $0.43 a year earlier. The board set the fourth-quarter base dividend at $0.36 per share, with any supplemental distribution still to be determined.
• NAV per share rose $0.13 sequentially to $13.34, while debt-to-equity declined to 1.63x from 1.71x. The company also reported $2.4 million in net realized and unrealized gains, versus losses a year ago.
• Management described portfolio credit quality as resilient: 97% of investments were senior secured, non-accruals were 0.96% of cost, and PIK income was 2.18% of total investment income. First-lien borrowers had 2.38x interest coverage on average.
• PSBD repurchased $5.2 million of shares during the quarter and had $24.8 million of capacity remaining under its buyback plan, which management said remains a near-term priority. The company also refinanced and extended its CLO, reducing its spread to SOFR plus 139 basis points from 172.
• Management expects rate volatility and uncertainty to keep deal activity muted in the near term, while noting that tighter spreads make private credit and secondary-market loans more attractive than new syndicated issuance. It said portfolio deployment will remain selective and buybacks or debt paydown may take priority when opportunities are less compelling.

Palmer Square Capital BDC Price Performance

PSBD traded up $0.03 on Wednesday, hitting $9.93. 294,667 shares of the stock were exchanged, compared to its average volume of 113,289. Palmer Square Capital BDC has a 12 month low of $9.34 and a 12 month high of $12.61. The business has a 50-day moving average of $10.00 and a two-hundred day moving average of $10.51. The firm has a market capitalization of $304.35 million, a price-to-earnings ratio of -10.03 and a beta of 0.85.

Palmer Square Capital BDC Announces Dividend

The business also recently declared a quarterly dividend, which was paid on Tuesday, October 13th. Investors of record on Friday, September 25th were paid a $0.36 dividend. This represents a $1.44 dividend on an annualized basis and a yield of 14.5%. The ex-dividend date of this dividend was Friday, September 25th. Palmer Square Capital BDC’s payout ratio is -145.45%.

Wall Street Analyst Weigh In

Several research firms recently weighed in on PSBD. UBS Group dropped their price target on Palmer Square Capital BDC from $11.00 to $10.00 and set a “neutral” rating for the company in a report on Tuesday, September 1st. Wall Street Zen upgraded Palmer Square Capital BDC from a “sell” rating to a “hold” rating in a research report on Saturday, August 8th. Finally, Zacks Research raised Palmer Square Capital BDC from a “strong sell” rating to a “hold” rating in a report on Monday, August 10th. Five equities research analysts have rated the stock with a Hold rating. Based on data from MarketBeat.com, the stock currently has a consensus rating of “Hold” and an average target price of $10.50.

Palmer Square Capital BDC Company Profile

Palmer Square Capital BDC, Inc is an externally managed business development company that seeks to provide financing to private middle-market companies. The company focuses primarily on privately originated and negotiated investments in senior secured loans and other debt instruments, with the goal of supporting businesses while generating current income for shareholders.

Palmer Square Capital BDC may invest across a range of industries and capital structures, including first-lien and unitranche loans, second-lien and subordinated debt, and select equity investments.