Stellus Capital Investment Corporation·Financial Services

Stellus Capital remains a sell due to ongoing NAV erosion, declining earnings, and persistent portfolio challenges. SCM's dividend yield is unsustainably high at 14.9%, with management confirming a payout cut of ~20–25% after Q2 2026. Net investment activity is negative, non-accruals have risen to 9.2% of cost, and NAV has declined every quarter for over a year.

Stellus Capital Management Closes Stellus Credit Fund IV PR Newswire HOUSTON, May 19, 2026

Firm Hits Fundraising Target with Approximately $1.5 Billion of Investable Capital 1 HOUSTON, May 19, 2026 /PRNewswire/ -- Stellus Capital Management, LLC ("Stellus" or the "Firm"), a leader in lower middle market direct lending, today announced the final close of Stellus Credit Fund IV ("SCF IV" or the "Fund"). The Firm met its fundraising target with approximately $1.5 billion of investable capital.

In the article I list all monthly-paying BDCs. This list is then reduced to a handful of BDCs. These remaining BDCs, in my view, are the one with the strongest prospect to generate durable income without permanent NAV decay.

Stellus Capital Investment NYSE: SCM reported first-quarter results that included lower net asset value, a modest decline in portfolio size and elevated non-accruals, while management signaled that the company's dividend is likely to move lower over time to better align with earnings and realized gains.

Leidos to build initial 3,000 low-cost containerized munitions through Department of War framework agreement PR Newswire
Stellus Capital Investment Corporation is a business development company specializing in investments in private middle-market companies. It invests through first lien, second lien, unitranche, and mezzanine debt financing, often with a corresponding equity investment. The fund prefers to invest in US and Canada. The fund seeks to invest in companies with an EBITDA between $5 million and $50 million.
Financial Services
Asset Management
0
2012-11-08
0.66