CION InvestmentNYSE: CION

CION Investment Corp remains undervalued, trading at a 34% discount to its NAV despite solid fundamentals and solid dividend coverage. The BDC's smaller size and shorter track record may be a contributor to its market mispricing compared to larger, more established peers. CION's portfolio performance has been resilient, with high credit quality and decreasing non-accruals year-over-year, despite higher for longer interest rates.

NEW YORK--(BUSINESS WIRE)--CION Investment Corporation (NYSE: CION) (the “Company” or “CION”) announced today that it has priced an underwritten public offering of $150.0 million aggregate principal amount of unsecured notes due 2029 (the “Notes”), which will result in net proceeds to the Company of approximately $145.4 million after the payment of underwriting discounts and commissions and estimated offering expenses payable by the Company. The Notes will mature on December 30, 2029 and may be.

This is not the right time to take high risk in the BDC space. Yet, as it is often the case, a challenging environment creates opportunities. In this article, I elaborate on two BDCs which indeed have some risks, but not to the extent that is currently priced in by the market.

CION Investment Corp. is a debt-focused BDC with $2 billion in assets invested primarily in first-lien floating rate debt. CION trades at a significant discount relative to peers, offering a strong dividend yield of nearly 12% with high coverage. CION has had past challenges, but they appear to be on the mend, and dividend coverage here is strong.

CION Investment Corporation has robust cash flow and significant dividend coverage.

CION Investment performed well in 2023 with a 32% total return but faces challenges in 2024. The company's dividend growth and share price upside potential may be negatively impacted by declining income and high debt maturities. CION's stock price is undervalued based on valuations and net asset value, but its overall rating score is affected by negative growth and poor stock price momentum.

MAIN is an established blue-chip BDC that many consider to be the industry's gold standard. CION is a relative newcomer without much of a publicly traded track record to judge it by. That being said, CION trades at a meaningful discount to MAIN and has a bit of a different focus in its investment portfolio.

CION Investment Corporation (NYSE:CION ) Q3 2023 Earnings Conference Call November 9, 2023 11:00 AM ET Company Participants Michael Reisner - Co-Chief Executive Officer Mark Gatto - Co-Chief Executive Officer Gregg Bresner - President and CIO Keith Franz - Chief Financial Officer Conference Call Participants Erik Zwick - Hovde Group Operator Good morning. And welcome to CION Investment Corporation's Third Quarter 2023 Earnings Conference Call.

CION Investment may struggle to increase earnings due to potential Fed rate cuts, leading to a decline in dividend coverage ratio. The company's cautious investment strategy and low new investments may also negatively impact prospects for sustainable growth in interest income. CION Investment's liquidity position is currently strong, but debt maturities in the future may put pressure on its liquidity.