Daily Stock Pick: Main Street Capital (MAIN)

This week, I'm looking for the fifth financial services representative of seven for my Ivy portfolio.

The financials sector includes nineteen industries all related to managing money: asset management; banks either global or from any of seven regions, capital markets, credit services, financial exchanges, insurance in six specializations, savings banks, and specialty finance.

Today I'm reviewing another mid-cap asset management firm this one named Main Street Capital Corp. Its trading ticker symbol is MAIN.

Main Street Capital Corp is an investment firm engaged in providing customized debt and equity financing to lower middle market companies and debt capital to middle market companies.

The investments portfolio of the company is typically made to support management buyouts, recapitalizations, growth financings, refinancings and acquisitions of companies that operate in diverse industry sectors.

The group invests in secured debt investments, equity investments, warrants and other securities of the lower middle market and middle market companies based in the US. Business is functioned through the U.S region and it derives the majority of the income from the source of fee, commission, and interest.

Main Street Capital Corporation was incorporated on March 9, 2007, and is based at Houston, Texas.

I use three key data points to gauge the value of any dividend equity-like Main Street Capital Corp:

(1) Price

(2) Dividends

(3) Returns

Besides those three, several other keys will finally unlock an equity or fund in which to invest.

Those first three primary keys, however, best tell whether a company has made, is making, and will make money.

MAIN Price

Main's price per share closed at $40.77 yesterday. A year ago its price was $38.51. Price rose $2.26 or 5.9% in the past year.

Assuming Main's stock trades in the range of $35.00 to $45.00 this year,

Main's recent $40.77 price could rise by $2.23 and go to $44.00 by late- May, 2020.

MAIN Dividends

Main's most recent declared monthly dividend was $0.205 declared May 7th and payable, July 15th.

That $0.205 Monthly dividend equates to an annual payout of $2.46 for a yield of 6.03% at yesterday's $40.77 closing price.

Gains For MAIN?

Adding a $2.46 annual estimated dividend to my $2.23 estimate of Main's price upside shows a $4.69 potential gross annual gain, per share, which will be reduced by costs to trade those shares.

Say we pay a little over $1,000.00 today at the $40.77 recent stock price would buy us 25 Main Street Capital Corp (MAIN) shares.

A $10 broker fee paid half at purchase and half at sale will cost us $0.40 per share.

Subtract that $0.40 brokerage cost from the estimated $4.69 gross annual gain leaves a net gain of $4.29 X 25 shares = $107.25 or a 10.7% net gain on a $1,019.25 investment.

Therefore, Main Street Capital Corp whose trading ticker symbol is MAIN, now shows a possible net gain of 10.7% including a 6.03% dividend yield.

Five brokers cover Main Street Capital Corp stock:

One says "buy" MAIN.

One says MAIN will "outperform".

Three say "hold" MAIN.

The consensus score is 2.40 or "outperform".

Therefore, you can look at Main Street Capital Corp and see it has made money, is making money, and could net a 10.7% gain including a 6.03% dividend yield. It could be more, it could be less.

The above speculation is based on past year performance. The actual results remain to be seen to determine if Main Street Capital Corp is worth your time and money.

Disclaimer: This article is for informational and educational purposes only and should not be construed to constitute investment advice. Nothing contained herein shall constitute a solicitation, ...

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