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Bain Capital Specialty Finance (BCSF)
NYSE:BCSF
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Bain Capital Specialty Finance
(NYSE:BCSF)
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Rating:66Neutral
Price Target:―
Bain Capital Specialty Finance's overall score reflects a balance of strong profitability and attractive valuation, countered by bearish technical indicators and concerns over revenue decline and negative cash flow. The robust earnings call underscores effective capital management and dividend strength, providing a strong income investment thesis.
Positive Factors
Strong Profitability
BCSF's strong profitability, demonstrated by high net profit and stable EBIT margins, indicates efficient operations and a solid financial foundation, supporting long-term sustainability.
Dividend Strength
The increase in dividends reflects strong cash flow management and shareholder return focus, enhancing investor confidence and supporting BCSF's income investment appeal.
Portfolio Credit Quality
Improved portfolio credit quality with low non-accrual investments suggests effective risk management, ensuring stability and reliability in BCSF's investment strategy.
Negative Factors
Revenue Decline
Significant revenue decline poses challenges to growth prospects, potentially impacting BCSF's ability to sustain its financial performance and expand its market presence.
Negative Cash Flow
Negative cash flow indicates inefficiencies in cash generation, which could hinder BCSF's ability to fund operations and investments, affecting long-term financial health.
Aimbridge Hospitality Underperformance
Underperformance in a key investment highlights potential vulnerabilities in BCSF's portfolio, which could lead to further financial adjustments and impact overall returns.
Bain Capital Specialty Finance (BCSF) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$911.40M
Dividend Yield12.81%
Average Volume (3M)419.34K
Price to Earnings (P/E)8.5
Beta (1Y)0.59
Revenue Growth-3.29%
EPS Growth-16.86%
CountryUS
EmployeesN/A
SectorFinancial
Sector Strength70
IndustryAsset Management
Share Statistics
EPS (TTM)0.47
Shares Outstanding64,868,510
10 Day Avg. Volume344,409
30 Day Avg. Volume419,340
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap2.53
Enterprise Value/Revenue11.04
Enterprise Value/Gross Profit14.68
Enterprise Value/Ebitda23.93
Forecast
1Y Price Target
$16.50Price Target Upside17.27% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
Bain Capital Specialty Finance Business Overview & Revenue Model
Company DescriptionBain Capital Specialty Finance, Inc. is business development company specializing in direct loans to middle-market companies. The fund seeks to invest in senior investments with a first or second lien on collateral, senior first lien, stretch senior, senior second lien, unitranche, mezzanine debt, junior securities, other junior investments, and secondary purchases of assets or portfolios that primarily consist of middle-market corporate debt. It typically invests in companies with EBITDA between $10 million and $150 million.
How the Company Makes MoneyBain Capital Specialty Finance generates revenue primarily through interest income and fees from its investment portfolio. The company extends loans and other credit facilities to middle-market companies, earning interest on these financial products. Additionally, BCSF may receive origination fees, management fees, and other transaction-related charges. The company also benefits from capital gains on equity investments within its portfolio. BCSF's ability to leverage Bain Capital's extensive network and industry expertise further enhances its deal flow and investment opportunities, contributing to its overall earnings.
Bain Capital Specialty Finance Earnings Call Summary
Earnings Call Date:Aug 05, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 10, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong net investment income, increased gross originations, and stable credit quality, all contributing to an attractive dividend yield. However, there were slight declines in net asset value and increased expenses. Market volatility also posed challenges, but overall, the positive aspects outweighed the negative.Q2-2025 Updates
Positive Updates
Strong Net Investment Income
Q2 net investment income per share was $0.47, representing an annualized yield on book value of 10.7%. This continues to demonstrate strong dividend coverage for shareholders, exceeding the regular dividend payout by 12%.
Increase in Gross Originations
BCSF's gross originations during Q2 were $530 million, up 73% year-over-year, showcasing the company's ability to source attractive investment opportunities despite a challenging market.
Stable Credit Quality
Investments on nonaccrual represent 1.7% and 0.6% at amortized cost and fair value, respectively, indicating stable credit quality. The nonaccrual rate remains low relative to the broader BDC sector average.
Attractive Dividend Yield
At BCSF's current market price, the dividend yield, inclusive of regular and special dividends, represents a 12.2% annualized yield.
Negative Updates
Slight Decrease in Net Asset Value
Net asset value per share was $17.56, down slightly by $0.08 per share from the prior quarter end.
Increased Expenses
Total expenses before taxes for the second quarter were $39.3 million, up from $33.7 million in the first quarter, driven by greater incentive fees and interest and debt financing expenses.
Market Volatility Impact
Increased market volatility at the beginning of the second quarter due to higher tariffs led to a temporary pause in new deal volume activities.
Company Guidance
In the second quarter of 2025, Bain Capital Specialty Finance reported strong financial performance driven by robust net investment income, which reached $0.47 per share, yielding an annualized return of 10.7% on book value. Notably, the net investment income exceeded the regular dividend payout by 12%, demonstrating strong dividend coverage. Earnings per share stood at $0.37, translating to an 8.3% annualized return on book value. The company's gross originations during the quarter totaled $530 million, marking a significant 73% increase year-over-year. The Board declared a third-quarter dividend of $0.42 per share, along with an additional $0.03 per share dividend, bringing the total to $0.45 per share, equivalent to a 10.2% annualized rate on the ending book value. Despite market volatility, Bain Capital leveraged its middle-market focus, achieving an average spread of over 580 basis points on new originations. The portfolio's credit quality remained stable, with nonaccrual investments at 1.7% of amortized cost. The company's net leverage ratio was 1.2x, and its liquidity was strong, with $796 million available at the quarter's end. Bain Capital's stock offered an attractive dividend yield of 12.2% based on the current market price.Bain Capital Specialty Finance Financial Statement Overview
Summary
Bain Capital Specialty Finance demonstrates strong profitability with a high net profit margin and stable EBIT margin, supported by a strong balance sheet with no debt and improved return on equity. However, revenue contraction and significantly negative cash flow raise concerns about future growth and liquidity.Income Statement
The income statement shows strong profitability with a gross profit margin of 100% due to revenue matching gross profit, indicating no direct costs. The net profit margin improved to 60.32% in 2024 from 41.43% in 2023, reflecting enhanced efficiency. However, the revenue declined by 25.03% from 2023 to 2024, pointing to potential growth challenges. EBIT margin remained stable, supporting continued operational profitability. Overall, while profitability is strong, declining revenue needs attention.65
Positive
Balance Sheet
The balance sheet reflects financial stability with a strong equity position, as indicated by a debt-to-equity ratio of 0 in 2024, showing all debts have been cleared. The equity ratio is healthy at 43.30%, suggesting a solid equity base relative to assets. Return on equity improved to 11.82% in 2024 from 10.85% in 2023, demonstrating enhanced shareholder returns. The elimination of total debt in 2024 improves financial leverage, but historical fluctuations in debt levels suggest potential volatility.70
Positive
Cash Flow
Cash flow statements highlight challenges, with negative free cash flow of -$27.1 million in 2024 compared to positive $219.3 million in 2023, indicating significant cash flow deterioration. The operating cash flow to net income ratio in 2024 is negative, showcasing inefficiency in cash generation from operations. The free cash flow to net income ratio is also negative, reflecting issues in maintaining liquidity. Overall, cash flow management requires improvement to support financial health.55
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 208.54M | 212.88M | 137.99M | 116.51M | 124.06M | 13.91M |
| Gross Profit | 156.82M | 138.19M | 137.99M | 116.51M | 145.29M | 13.91M |
| EBITDA | 96.21M | 199.15M | 0.00 | 157.73M | 0.00 | 0.00 |
| Net Income | 111.06M | 119.42M | 123.38M | 105.48M | 119.81M | 8.28M |
Balance Sheet | ||||||
| Total Assets | 2.77B | 2.63B | 2.47B | 2.59B | 2.57B | 2.60B |
| Cash, Cash Equivalents and Short-Term Investments | 164.75M | 97.10M | 49.40M | 59.78M | 117.42M | 54.68M |
| Total Debt | 0.00 | 1.39B | 1.26B | 1.39B | 1.41B | 1.46B |
| Total Liabilities | 1.64B | 1.49B | 1.34B | 1.48B | 1.47B | 1.54B |
| Stockholders Equity | 1.14B | 1.14B | 1.14B | 1.12B | 1.10B | 1.07B |
Cash Flow | ||||||
| Free Cash Flow | -109.13M | -27.10M | 219.26M | -316.83M | 265.55M | 89.42M |
| Operating Cash Flow | -109.13M | -27.10M | 219.26M | -316.83M | 265.55M | 89.42M |
| Investing Cash Flow | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financing Cash Flow | 158.88M | 14.25M | -231.43M | 238.33M | -138.63M | -76.52M |
Bain Capital Specialty Finance Technical Analysis
Negative
14.07
Price Trends
14.44
Negative
14.57
Negative
14.97
Negative
Market Momentum
-0.04
Negative
48.08
Neutral
40.42
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BCSF, the sentiment is Negative. The current price of 14.07 is above the 20-day moving average (MA) of 13.95, below the 50-day MA of 14.44, and below the 200-day MA of 14.97, indicating a neutral trend. The MACD of -0.04 indicates Negative momentum. The RSI at 48.08 is Neutral, neither overbought nor oversold. The STOCH value of 40.42 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for BCSF.
Bain Capital Specialty Finance Risk Analysis
Bain Capital Specialty Finance disclosed 2 risk factors in its most recent earnings report. Bain Capital Specialty Finance reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Bain Capital Specialty Finance Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
| ― | $833.05M | 9.38 | 8.95% | 10.74% | 5.87% | -12.64% | |
| ― | $1.13B | 8.08 | 9.36% | 16.68% | -55.16% | 47.09% | |
| ― | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
| ― | $921.49M | 10.80 | 6.60% | 13.45% | -17.05% | -40.15% | |
| ― | $911.40M | 8.52 | 9.42% | 12.81% | -3.29% | -16.86% | |
| ― | $1.03B | 12.78 | 6.18% | 13.34% | 39.05% | -32.62% | |
| ― | $905.86M | 10.80 | 7.37% | 13.47% | 55.25% | -47.71% |
* Financial Sector Average
BCSF
Bain Capital Specialty Finance
14.07
-0.80
-5.38%
NMFC
New Mountain Finance
9.67
-0.16
-1.63%
PFLT
Pennantpark $
9.13
-0.73
-7.40%
SLRC
SLR Investment Corp.
15.27
1.43
10.33%
GSBD
Goldman Sachs BDC
9.98
-1.15
-10.33%
CGBD
Carlyle Secured Lending Inc
12.64
-2.30
-15.39%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.