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Main Street (MAIN) Q4 Earnings Beat Estimates, Expenses Rise

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Main Street Capital Corporation’s (MAIN - Free Report) fourth-quarter 2020 net investment income of 59 cents per share surpassed the Zacks Consensus Estimate of 50 cents. However, the bottom line fell 4.8% from the year-ago figure.

Results were favorably impacted by higher total investment income. Also, the liquidity position remained strong in the quarter. However, a decrease in net asset value and a rise in operating expenses were headwinds.

Distributable net investment income was $42.3 million compared with the prior-year quarter’s $42 million.

In 2020, the company reported net investment income of $148.8 million or $2.26 per share, down from $167.4 million or $2.66 in 2019.

Total Investment Income Increases, Expenses Rise

Total investment income was $62.5 million, up 3% from the year-ago quarter. Higher dividend income from control investments resulted in the upside. The top-line figure also beat the Zacks Consensus Estimate of $54.9 million.

Total expenses increased 6.9% year over year to $22.9 million. Higher compensation led to the rise.

Balance Sheet Position

As of Dec 31, 2020, Main Street’s net asset value (NAV) was $22.35 per share compared with $23.91 on Dec 31, 2019.

As of Dec 31, 2020, the company had $31.9 million in cash and cash equivalents, $511 million of unused capacity under Credit Facility, with which it seeks to support investment and operating activities. Also, it had $40.2 million of remaining SBIC debenture capacity.

Our Take

Steady improvements in total investment income and strong origination volume are anticipated to support the company’s bottom-line growth. Moreover, strong liquidity position keeps it well-poised for growth. However, a decline in NAV and elevated costs are major drags.

Main Street Capital Corporation Price, Consensus and EPS Surprise

 

Main Street Capital Corporation Price, Consensus and EPS Surprise

Main Street Capital Corporation price-consensus-eps-surprise-chart | Main Street Capital Corporation Quote

Currently, Main Street carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Finance Stocks

Webster Financial (WBS - Free Report) reported fourth-quarter 2020 adjusted earnings per share of 99 cents, which surpassed the Zacks Consensus Estimate of 72 cents. The reported figure excluded noteworthy items such as charges related to optimization initiatives.

Signature Bank (SBNY - Free Report) reported fourth-quarter 2020 earnings per share of $3.26, beating the Zacks Consensus Estimate of $2.91. Also, the bottom line increased 18.1% from the prior-year quarter’s reported number.

Huntington Bancshares’ (HBAN - Free Report) fourth-quarter 2020 earnings per share of 27 cents lagged the Zacks Consensus Estimate of 30 cents. Also, the bottom line fell 3.6% from the prior-year quarter figure.

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