Ladenburg Thalmann analyst Christopher Nolan has initiated coverage of TriplePoint Venture Growth BDC Corp. at "neutral," writing that strong fund inflows and equity valuation appreciation make the company "strategically well positioned" in the venture capital sector.
Nolan sees the recent equity investment of Goldman Sachs Group Inc.'s asset management arm into TriplePoint as a "vote of confidence," noting that the investment positions the business development company for "good growth." But he pointed out that high levels of noncash payment-in-kind income affects earnings quality and dividend sustainability. He also wrote that "relatively large" credit exposures to portfolio companies and a history of elevated realized debt losses divert investors' attention away from the company's asset quality.
Nolan believes that TriplePoint's dividend payout is secure, noting that his earnings estimate fully covers the current dividend but cash earnings do not.
His net investment income per share estimates are $1.62 for 2017 and $1.45 for 2018.
