Fidus Investment Corporation·Financial Services

Fidus Investment has dropped to 52-week lows last week, presenting a contrarian buying opportunity amid sector-wide fears and geopolitical turmoil. FDUS benefits from a variable rate loan portfolio, with 78.1% in first liens and $1.3B in assets, positioning it well if rates rise. Net investment income grew 5% year-over-year, supporting a multi-layered dividend strategy with coverage consistently near or above 100%.

The performance of the VanEck BDC Income Exchange Traded Fund, which includes over 30 BDCs in its market cap-weighted index, gives a good sense of how BDCs performed in these different environments. During the rate-cutting period, which initiated the pressure on BDC profits, BDCs have had to cope with the DeepSeek AI shock, peaking just ahead of that event on 19 February 2025. With AI technologies seemingly set to destroy any potential profitability these firms had, many BDCs were suddenly faced with having to write down large portions of their portfolios. But not all BDCs are in that boat.

MPLX and Fidus Investment are both rated ‘Buy' for durable, high-yield income portfolios. MPLX offers a 7.4% yield, robust cash flow, and 12.5% expected annual distribution growth, underpinned by fee-based contracts and major natural gas/NGL projects. FDUS trades at a 10% discount to NAV, has an 11.8% yield, disciplined underwriting, and a resilient first-lien loan portfolio with low non-accruals.

Fidus Investment remains fundamentally strong, with rising NAV per share, robust dividend coverage, and a conservative balance sheet. Q4 2025 saw NII per share growth, 121% dividend coverage, non-accruals below 1%, and 10.7% portfolio exposure to high-performing equity. However, significant SaaS and ARR loan exposure (37% and 7.5% of portfolio) make me less comfortable than before.

Fidus Investment (NASDAQ: FDUS - Get Free Report) and Blackstone Secured Lending Fund (NYSE: BXSL - Get Free Report) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, risk, profitability, valuation and earnings. Profitability This table compares Fidus Investment

Fidus Investment (NASDAQ: FDUS) reported a fourth quarter marked by its highest quarterly originations to date, as management pointed to a stronger M&A environment and the release of deal activity that had been delayed earlier in the year. On the company's earnings call, Chairman and CEO Ed Ross said fourth quarter originations totaled $213.7 million, which
Fidus Investment Corporation is a business development company. It specializing in leveraged buyouts, refinancings, change of ownership transactions, recapitalizations, strategic acquisitions, mezzanine, growth capital, business expansion, lower middle market investments, debt investments, subordinated and second lien loans, senior secured and unitranche debt, preferred equity, warrants, subordinated debt, senior subordinated notes, junior secured loans, and unitranche loans. It does not invest in turnarounds or distressed situations. The fund prefers to invest in aerospace and defense, business services, consumer products and services including retail, food, and beverage, healthcare products and services, industrial products and services, information technology services, niche manufacturing, transportation and logistics, and value-added distribution sectors. It seeks to invest in companies based in United States. The fund typically invests between $5 million and $15 million per transaction in companies with annual revenues between $10 million and $150 million and an annual EBITDA between $3 million and $20 million, but it can occasionally invest in larger or smaller companies. It seeks to acquire minority equity stakes and board observation rights in conjunction with its investments.