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4 Reasons to Add PennantPark (PFLT) to Your Portfolio Now
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Amid the current tough operating backdrop (expectations of an economic slowdown/recession), investors are looking out for an attractive investment option. Today, we are discussing one such stock, PennantPark Floating Rate Capital Ltd. (PFLT - Free Report) .
PFLT’s top line is expected to improve in the near term. The company’s earnings are expected to rise in the upcoming years. Thus, driven by strong fundamentals and solid growth prospects, it appears to be a promising investment option right now.
Analysts are optimistic regarding PennantPark’s earnings growth potential. The Zacks Consensus Estimate for PFLT’s fiscal 2023 earnings has been revised 7.2% upward over the past 60 days. It currently sports a Zacks Rank #1 (Strong Buy).
Looking at its price performance, shares of PFLT have gained 0.8% over the past three months compared with the industry’s 4% growth.
Image Source: Zacks Investment Research
Let’s check out the below-mentioned factors that make PennantPark stock a solid pick right now.
Earnings Per Share (EPS) Growth: In the past three to five years, PennantPark witnessed EPS growth of 0.56%. Further, earnings are projected to rise 13.56% in fiscal 2023.
The stock has a decent earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in one of the trailing four quarters, met twice and missed once, the average surprise being 2.39%.
Revenue Strength: PennantPark’s total revenues noticed a rising trend over the past few quarters. It recorded revenues of $34.56 million in second-quarter fiscal 2023 (ended Mar 31, 2023), representing a gain of around 40% from the prior-year quarter. PFLT’s top line is expected to keep improving in the near term. In fiscal 2023, its revenues are expected to register growth of 27.75%.
Steady Capital Deployments: PennantPark pays quarterly dividends on a regular basis. On May 10, management announced a quarterly dividend of 10.25 cents per share. This represents a hike of 2.5% from the prior payout.
Apart from regular dividends, PFLT has been enhancing shareholders’ value through its share repurchase plans. In fact, in February 2022, the company’s board of directors approved a share repurchase program, authorizing PennantPark to repurchase up to $25 million of its outstanding shares of common stock.
During the fiscal year ended September 30, 2022, it repurchased around 1.8 million shares worth $13.2 million. However, in the first half of fiscal 2023 (ended Mar 31, 2023), it did not make any repurchases and the plan expired on Mar 31, 2023.
Nonetheless, PennantPark’s capital deployments are sustainable on decent cash levels and unused borrowing capacity under the credit facility of $63.1 million and $122.6 million, respectively.
Favorable Valuation: PFLT stock looks undervalued right now with respect to its price to book (P/B), price to cash flow (P/CF) and price to earnings (P/E) ratios. It has a P/B ratio of 0.94, below the industry average of 1.36. Moreover, its P/CF and P/E (F1) ratios of 6.37 and 7.82 compares favorably with the industry’s 9.82 and 11.22, respectively.
Other Stocks Worth a Look
A couple of other top-ranked stocks from the investment management sector are Janus Henderson Group (JHG - Free Report) and Monroe Capital (MRCC - Free Report) .
The Zacks Consensus Estimate for JHG’s 2023 earnings has been revised 1.8% upward over the past 60 days. It carries a Zacks Rank #2 (Buy) at present. The stock has gained 16% over the past six months.
The consensus estimate for MRCC’s 2023 earnings has been revised 9.5% upward over the past 60 days. It presently flaunts a Zacks Rank #1. The company’s share price has decreased 6.8% over the past six months. You can see the complete list of today’s Zacks #1 Rank stocks here.
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4 Reasons to Add PennantPark (PFLT) to Your Portfolio Now
Amid the current tough operating backdrop (expectations of an economic slowdown/recession), investors are looking out for an attractive investment option. Today, we are discussing one such stock, PennantPark Floating Rate Capital Ltd. (PFLT - Free Report) .
PFLT’s top line is expected to improve in the near term. The company’s earnings are expected to rise in the upcoming years. Thus, driven by strong fundamentals and solid growth prospects, it appears to be a promising investment option right now.
Analysts are optimistic regarding PennantPark’s earnings growth potential. The Zacks Consensus Estimate for PFLT’s fiscal 2023 earnings has been revised 7.2% upward over the past 60 days. It currently sports a Zacks Rank #1 (Strong Buy).
Looking at its price performance, shares of PFLT have gained 0.8% over the past three months compared with the industry’s 4% growth.
Image Source: Zacks Investment Research
Let’s check out the below-mentioned factors that make PennantPark stock a solid pick right now.
Earnings Per Share (EPS) Growth: In the past three to five years, PennantPark witnessed EPS growth of 0.56%. Further, earnings are projected to rise 13.56% in fiscal 2023.
The stock has a decent earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in one of the trailing four quarters, met twice and missed once, the average surprise being 2.39%.
Revenue Strength: PennantPark’s total revenues noticed a rising trend over the past few quarters. It recorded revenues of $34.56 million in second-quarter fiscal 2023 (ended Mar 31, 2023), representing a gain of around 40% from the prior-year quarter. PFLT’s top line is expected to keep improving in the near term. In fiscal 2023, its revenues are expected to register growth of 27.75%.
Steady Capital Deployments: PennantPark pays quarterly dividends on a regular basis. On May 10, management announced a quarterly dividend of 10.25 cents per share. This represents a hike of 2.5% from the prior payout.
Apart from regular dividends, PFLT has been enhancing shareholders’ value through its share repurchase plans. In fact, in February 2022, the company’s board of directors approved a share repurchase program, authorizing PennantPark to repurchase up to $25 million of its outstanding shares of common stock.
During the fiscal year ended September 30, 2022, it repurchased around 1.8 million shares worth $13.2 million. However, in the first half of fiscal 2023 (ended Mar 31, 2023), it did not make any repurchases and the plan expired on Mar 31, 2023.
Nonetheless, PennantPark’s capital deployments are sustainable on decent cash levels and unused borrowing capacity under the credit facility of $63.1 million and $122.6 million, respectively.
Favorable Valuation: PFLT stock looks undervalued right now with respect to its price to book (P/B), price to cash flow (P/CF) and price to earnings (P/E) ratios. It has a P/B ratio of 0.94, below the industry average of 1.36. Moreover, its P/CF and P/E (F1) ratios of 6.37 and 7.82 compares favorably with the industry’s 9.82 and 11.22, respectively.
Other Stocks Worth a Look
A couple of other top-ranked stocks from the investment management sector are Janus Henderson Group (JHG - Free Report) and Monroe Capital (MRCC - Free Report) .
The Zacks Consensus Estimate for JHG’s 2023 earnings has been revised 1.8% upward over the past 60 days. It carries a Zacks Rank #2 (Buy) at present. The stock has gained 16% over the past six months.
The consensus estimate for MRCC’s 2023 earnings has been revised 9.5% upward over the past 60 days. It presently flaunts a Zacks Rank #1. The company’s share price has decreased 6.8% over the past six months. You can see the complete list of today’s Zacks #1 Rank stocks here.