Triangle Capital Corporation ( TCAP - Snapshot Report ) recently posted impressive second quarter results, including an earnings surprise of 8.3%. Since then, shares and earnings momentum for this non-diversified management investment company have been on the rise. In addition, this Zacks #2 Rank (Buy) pays a regular quarterly dividend that yields a stupendous 8.14%.

Impressive Second Quarter Results

On August 1, Triangle Capital reported second quarter 2012 net investment income of 52 cents per share, outpacing the Zacks Consensus Estimate of 48 cents. However, this was lower than the year-ago earnings of 64 cents.

Total investment income of $16.4 million surged 33.8% from the year-ago quarter. Meanwhile, total expenses jumped 27.8% year over year to $7.9 million, reflecting higher interest and other financing fees.

Upward Earnings Estimate Revisions

The past 30 days have seen four of eight estimates move higher for 2012, pushing the Zacks Consensus Estimate up by a couple of cents or 1.0% to $2.06 per share. For 2013, three of eight estimates moved north over the same time frame, helping the Zacks Consensus Estimate advance two cents or 0.9% to $2.20.

The Zacks Consensus Estimate for 2012 is almost flat compared with the prior-year earnings, while the expected growth rate for 2013 is 6.5%.

Dividend Payment

Since its IPO in 2007, Triangle Capital has been consistently paying dividends. The company announced a dividend hike of 6.4% in May 2012, marking the 12th dividend increase. Currently the company pays a quarterly dividend of 50 cents per share, affirming a yield of 8.14%.

Valuation Not So Cheap

Shares of Triangle Capital currently trade at 11.9x 12-month forward earnings, a 6% discount to the peer group average of 12.7x. Its price to book ratio of 1.6 is at a 43% premium to the industry median of 1.1. The company has a trailing 12-month ROE of 13.0%, compared with the peer group average of 9.3%.

Chart Shows Strength

The stock has been trading above its 200 and 50 days moving average since June 2012. Furthermore, since April 2012, the stock has also outpaced the S&P 500.

Triangle Capital is one of the strongest investment companies with rising estimates, a solid dividend yield and reasonable valuation. Moreover, with consecutive dividend increases, it offers attractive upside potential.

Headquartered in Raleigh, North Carolina, Triangle Capital is primarily engaged in providing mezzanine financing with equity components to the firms located throughout the United States. The company primarily focuses on investments in companies having annual revenues of $10-$200 million and EBITDA of $3 million or more. As of June 30, 2012, Triangle Capital had investments in 69 portfolio companies with a total cost of $590.9 million. Incorporated in October 2006, the company started trading on NYSE from February 2007. With a market capitalization of $671.5 million, Triangle Capital competes with American Capital Ltd. (ACAS) among others.