MAIN is morphing back to stage #2. The stock seems to be performing well and offers a good buying opportunity. It pays dividends monthly. However, fundamentally, the stock seems to be providing grim data which may have an impact on the stock growth. MAIN was offering great dividends and small growth matching the index (7.16% vs. 7.23% of SPY). This may not be the case unless financial data improve.
The monthly chart shows the stock moving higher slowly over time since its inception. It had a huge setback in 2020 when the stock crashed but the company kept paying dividends. On top, the company paid a few special dividends further boosting investors’ income.
The chart above seems to be indicating a dividend cut in 2021 but other sources do not show it:
MAIN is unfortunately trading above its NAV making the stock relatively expensive:
The company has a somewhat erratic revenue stream but overall, its revenue is growing over time. It however grows 6.75% annually. Five-year revenue growth is 9.47%.
The free cash flow of MAIN is pathetic and the company seems to be burning cash.
Another concern is growing debt and little cash to cover it:
The company may cover the lack of cash by issuing more shares and issuing new debt. In the raising interest rate environment, this may backfire and break the company’s financials. Thus, investing in this company requires caution and not investing all of your money.
The company may be a bit expensive based on the NAV valuation (currently, it trades at a premium). Still, I believe this is compensated for by dividends well enough to be investing.
Fundamentally, the stock offers good value at the current price. It appears safe to buy here.
Price vs FCFE/AFFO shows, at least for now, that the company makes enough money to cover the dividend:
The stock is now AGGRESSIVE BUY
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