Palmer Square Capital BDC (NYSE:PSBD) Posts Earnings Results, Misses Estimates By $0.04 EPS

Palmer Square Capital BDC (NYSE:PSBD) released its quarterly earnings data on Wednesday. The company reported $0.39 earnings per share for the quarter, missing analysts’ consensus estimates of $0.43 by ($0.04), Zacks reports. The business had revenue of $13.06 million during the quarter, compared to the consensus estimate of $25.97 million. Palmer Square Capital BDC had a positive return on equity of 11.01% and a negative net margin of 26.82%.

Here are the key takeaways from Palmer Square Capital BDC’s conference call:

• Palmer Square Capital BDC generated $0.39 per share of net investment income in the second quarter, matching its $0.39 per-share dividend, including a $0.03 supplemental payment. The board declared a third-quarter base dividend of $0.36 per share.
• Net investment income declined to $12.0 million from $13.8 million a year earlier, primarily reflecting lower base rates, while NAV per share fell to $13.21 from $13.30 amid valuation declines in broadly syndicated loans.
• Management reported resilient credit performance, including a low 0.29% non-accrual rate, a portfolio that is 96% senior secured, diversified across 45 industries, and PIK income equal to only 1.37% of total investment income.
• The company expanded its share repurchase authorization to $30 million, with approximately $4 million used through the second quarter, and expects to deploy the program meaningfully while maintaining appropriate leverage.
• PSBD reset and extended its BDC CLO, reducing the weighted-average debt cost to SOFR plus 1.39% from 1.72% and extending the reinvestment period to 2031; management expects the transaction to be fully accretive beginning in the fourth quarter. Investment activity remains subdued, but discounted liquid-loan and wider-spread private-credit opportunities are emerging.

Palmer Square Capital BDC Price Performance

Shares of NYSE PSBD traded up $0.47 during mid-day trading on Thursday, hitting $10.44. 55,224 shares of the company’s stock traded hands, compared to its average volume of 112,887. Palmer Square Capital BDC has a 1 year low of $9.34 and a 1 year high of $14.43. The company’s 50-day moving average is $10.35 and its two-hundred day moving average is $10.70. The company has a market capitalization of $324.90 million, a P/E ratio of -10.04 and a beta of 0.84.

Palmer Square Capital BDC Dividend Announcement

The firm also recently announced a quarterly dividend, which will be paid on Tuesday, October 13th. Stockholders of record on Friday, September 25th will be given a dividend of $0.36 per share. This represents a $1.44 annualized dividend and a dividend yield of 13.8%. The ex-dividend date is Friday, September 25th. Palmer Square Capital BDC’s dividend payout ratio is currently -138.46%.

Insiders Place Their Bets

In related news, major shareholder Martin C. Bicknell acquired 21,484 shares of the firm’s stock in a transaction on Tuesday, July 7th. The shares were acquired at an average cost of $10.47 per share, for a total transaction of $224,937.48. Following the completion of the transaction, the insider directly owned 373,472 shares in the company, valued at approximately $3,910,251.84. This trade represents a 6.10% increase in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available at this hyperlink. Insiders purchased 108,472 shares of company stock worth $1,155,558 over the last quarter. Insiders own 1.10% of the company’s stock.

Hedge Funds Weigh In On Palmer Square Capital BDC

Large investors have recently modified their holdings of the stock. Citadel Advisors LLC bought a new stake in Palmer Square Capital BDC in the third quarter worth $230,000. Jane Street Group LLC purchased a new position in shares of Palmer Square Capital BDC during the 1st quarter worth about $360,000. XTX Topco Ltd bought a new position in Palmer Square Capital BDC during the 4th quarter valued at about $351,000. Trexquant Investment LP grew its holdings in Palmer Square Capital BDC by 17.6% during the 4th quarter. Trexquant Investment LP now owns 50,118 shares of the company’s stock valued at $611,000 after purchasing an additional 7,496 shares during the last quarter. Finally, Two Sigma Investments LP raised its position in Palmer Square Capital BDC by 142.9% in the 3rd quarter. Two Sigma Investments LP now owns 131,545 shares of the company’s stock worth $1,614,000 after purchasing an additional 77,393 shares during the period. Institutional investors own 6.52% of the company’s stock.

Wall Street Analysts Forecast Growth

Several research analysts have weighed in on PSBD shares. Noble Financial started coverage on Palmer Square Capital BDC in a research note on Wednesday, June 24th. They issued a “neutral” rating for the company. UBS Group dropped their target price on shares of Palmer Square Capital BDC from $11.50 to $11.00 and set a “neutral” rating for the company in a research report on Monday, April 20th. Zacks Research cut shares of Palmer Square Capital BDC from a “hold” rating to a “strong sell” rating in a research note on Friday, May 22nd. Wall Street Zen downgraded shares of Palmer Square Capital BDC from a “hold” rating to a “sell” rating in a report on Saturday, May 9th. Finally, Royal Bank Of Canada dropped their price objective on shares of Palmer Square Capital BDC from $12.00 to $11.00 and set a “sector perform” rating for the company in a report on Wednesday, May 27th. Four analysts have rated the stock with a Hold rating and one has assigned a Sell rating to the company’s stock. Based on data from MarketBeat.com, Palmer Square Capital BDC presently has an average rating of “Reduce” and a consensus target price of $10.75.

About Palmer Square Capital BDC

Palmer Square Capital BDC Inc (NYSE: PSBD) is a closed-end, externally managed business development company that provides customized financing solutions to middle-market companies in the United States. The firm offers a broad range of debt and equity products—including first-lien and second-lien senior secured loans, unitranche financings, mezzanine debt and equity co-investments—to support corporate acquisitions, refinancings, growth initiatives and balance sheet restructurings.

PSBD primarily targets established privately owned and sponsored businesses across diverse industries such as healthcare, business services, industrials and consumer products.