Crescent Capital BDCNASDAQ: CCAP

Crescent Capital BDC (CCAP) has an impressive earnings surprise history and currently possesses the right combination of the two key ingredients for a likely beat in its next quarterly report.

Income investors should consider Crescent Capital BDC and Fidus Investment for their portfolios, as both trade below Net Asset Values and offer growth potential. CCAP, despite a short track record, shows strong investment activity, solid balance sheet, and consistent dividend payouts, making it a defensively positioned growth opportunity. FDUS has a longer track record, impressive dividend growth, and a solid balance sheet with a lower leverage ratio, offering stability and income reliability.

An investor's cash flow should be measured alongside net worth as a measure of financial resiliency. Crescent Capital offers an 8.9% yield, focusing on first-lien loans in cash flow-generating, private equity-backed middle-market businesses, with a robust portfolio and strong financials. Federal Realty, a top-tier REIT, provides a 3.9% yield, high-quality mixed-use properties in affluent areas, and a 57-year streak of dividend increases.

Crescent Capital BDC has a well-diversified, defensive portfolio with 89.2% first-lien debt and decreasing non-accruals, indicating high portfolio quality. CCAP is sensitive to interest rate cuts due to its floating-rate debt investments, but lower interest expenses and increased market activity could somewhat offset this. Despite potential interest rate cuts, CCAP's dividends remain well-covered, with a strong net investment income per share providing robust dividend coverage.

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Recently, Crescent Capital has outperformed the BDC market delivering positive returns, while the index has dropped in the negative return territory. Q2, 2024 earnings deck helps explain this, where we can see a continued generation of robust cash flows, solid portfolio quality and improved transaction outlook. In this article, I dissect the Q2 earnings and explain in detail why I have remained bullish.

Crescent Capital BDC (CCAP) came out with quarterly earnings of $0.59 per share, beating the Zacks Consensus Estimate of $0.58 per share. This compares to earnings of $0.56 per share a year ago.

Buying and selling stocks involves emotions and hopes for the future, making it a complex decision-making process. That's why a buy-and-hold strategy may work better, especially when it comes to dividend stocks that pay you for holding them. Income stocks like CCAP and CNQ offer potentially strong long-term total return potential, allowing investors to capitalize on undervalued opportunities while receiving recurring income.

Crescent Capital BDC, Inc. is a well-managed business development company with a floating-rate focus and solid dividend metrics. The company pays growing supplemental dividends and has a low pay-out ratio, but may face challenges in a lower-rate environment. Crescent Capital is trading at a 4% discount to book value, but may disappoint investors due to its aggressive floating-rate posture and potential impact of rate cuts.