Main Street (MAIN) Rewards Investors With 2.5% Dividend Hike
Zacks Investment Research | May 08, 2019 08:02AM ET
Main Street Capital Corporation (NYSE:MAIN) has increased its monthly common stock dividend for third-quarter 2019 by 2.5% from the previous payout to 20.5 cents. Prior to this hike, the company had raised dividend by 2.6% in February 2019.
The new dividend will be paid on Jul 15, Aug 15 and Sep 16 to shareholders on record as of Jun 28, Jul 18 and Aug 20, respectively.
We remain optimistic about its potential to continue enhancing shareholder value, driven by strong cash-generation capabilities.
Over the last three-five years, this Zacks Rank #2 (Buy) company witnessed earnings per share growth of 4.5%. Also, it is expected to deliver strong earnings performance as indicated by its projected earnings growth of 2.8% for 2020.
Moreover, organic growth has remained strong for Main Street, which can be seen from its revenue story. Revenues witnessed a CAGR of 13.5% over the last five years (2014-2018). The company’s projected sales growth rate of 6.9% for 2019 and 8.2% for 2020 indicates constant upward momentum.
Main Street’s debt/equity ratio is 0.23 compared with the industry average of 0.47, reflecting lower debt burden compared with the industry. It highlights the company’s sound financial flexibility.
Also, the company’strailing 12-month return on equity (ROE) reflects its superiority in terms of utilizing shareholders’ fund. The company’s ROE of 10.76% compares favorably with 9.21% for the industry.
Our Viewpoint
Main Street’s growth prospects look encouraging based on its strong capital position and robust fundamentals. Further, the projected increase in earnings is encouraging. Also, the company has been able to gain analysts’ confidence, as indicated by a slight upward revision in the Zacks Consensus Estimate for current-year earnings over the past 60 days.
The stock has gained 6.9% over the past three months, outperforming 4.5% growth of the industry it belongs to.
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