Gladstone CapitalNASDAQ: GLAD

Gladstone Capital (GLAD) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.

MCLEAN, VA / ACCESSWIRE / November 4, 2024 / Gladstone Capital Corporation (Nasdaq:GLAD) ("Gladstone Capital") announced today the sale of its equity interest and the prepayment of its debt investment in Antenna Research Associates, Inc. ("ARA"). As a result of this transaction, Gladstone Capital realized a significant gain on its equity investment.

MCLEAN, VA / ACCESSWIRE / October 8, 2024 / Gladstone Capital Corporation (Nasdaq:GLAD) (the "Company") announced today that its board of directors declared the following monthly cash distributions for October, November and December 2024 and also announced its plan to report earnings for its fourth fiscal quarter ended September 30, 2024. Cash Distributions: Common Stock: $0.165 per share of common stock for each of October, November and December 2024, payable per the table below.

The Fed is about to cut interest rates, which should start pushing down the overall yield levels. While this will render a less interesting environment for dividend investors to pick securities, there are also some specific names, where the lower financing costs will unlock notable value. In this article, I elaborate on two monthly paying dividend stocks that should become even more attractive after the Fed reduces the interest rates.

Gladstone Capital benefits from rising interest rates, but potential rate cuts could negatively impact its net investment income and dividend sustainability. Despite strong dividend coverage currently, GLAD's heavy reliance on floating rate investments makes future dividend sustainability uncertain if rates decline significantly. Trading at a premium to NAV, GLAD's valuation does not fully account for the risk of interest rate cuts, leading me to rate it as a hold.

Gladstone Capital is a relatively small BDC focusing on US lower middle market companies through debt and equity investments. Target entities have EBITDA ranging from $3m to $25m. GLAD's portfolio has a higher share of first-lien debt investments and lower non-accruals than a close peer. As a result, its dividend has better coverage. Nevertheless, the Company remains exposed to market-driven risk factors such as potential recession (rising non-accruals) and interest rate cuts (worse dividend coverage).

MCLEAN, VA / ACCESSWIRE / August 22, 2024 / Gladstone Capital Corporation (Nasdaq:GLAD) (the "Company") announced that Katharine Cornell Gorka has been elected to the 2027 class of Directors for the Company, effective August 22, 2024. Ms. Gorka, 64, is the President of Threat Knowledge Group, which provides training and expertise on threats to U.S. national security, and also serves as the chair of the Fairfax County Republican Party.

Gladstone Capital operates as a business development company that focuses on making debt investments to middle market companies. GLAD's portfolio strategy has exposure to 94% floating rate investments, which has helped them capitalize on higher interest rates. However, interest rates may get cut and negatively impact earnings. GLAD's Q3 earnings showed a 14% increase in net investment income.

Gladstone Capital (GLAD) came out with quarterly earnings of $0.57 per share, beating the Zacks Consensus Estimate of $0.53 per share. This compares to earnings of $0.62 per share a year ago.