Main Street Capital Corporation (MAIN) Bundle
A Brief History of Main Street Capital Corporation
Company Overview
Main Street Capital Corporation (NYSE: MAIN) is a publicly traded business development company that provides customized debt and equity financing to lower middle market companies and private equity sponsors. The company was founded in 2007 and has grown its portfolio significantly since its initial public offering (IPO).
Financial Performance
As of September 30, 2024, Main Street reported total investment income of $136.8 million, an increase of 11% from $123.2 million during the same period in 2023. Net investment income for the same period was $87.6 million, reflecting a 7% increase year-over-year.
| Financial Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Total Investment Income | $136.8 million | $123.2 million | 11% |
| Net Investment Income | $87.6 million | $82.2 million | 7% |
| Distributable Net Investment Income | $92.97 million | $86.17 million | 8% |
Debt Issuances
In December 2022, Main Street issued $100 million of 7.84% Series A unsecured notes due December 2025. In February 2023, an additional $50 million was issued at a fixed rate of 7.53%. The total outstanding principal amount of these notes was $150 million as of September 30, 2024.
Stock Performance and Dividends
During the nine months ended September 30, 2024, Main Street sold 2,319,780 shares of common stock at a weighted-average price of $49.48 per share, raising $114.8 million in gross proceeds. The company declared monthly dividends of $0.245 for each month of Q4 2024, totaling $0.735 per share for the quarter.
| Dividend Declaration | Amount per Share | Payment Date |
|---|---|---|
| Regular Monthly Dividends (Q4 2024) | $0.245 | October, November, December 2024 |
| Total for Q4 2024 | $0.735 |
Investment Strategy
Main Street's investment strategy focuses on creating a diversified portfolio across various sectors, including healthcare, manufacturing, and technology. As of September 30, 2024, the fair value of the company's investment portfolio was approximately $2.3 billion.
Recent Developments
In November 2024, Main Street declared a supplemental dividend of $0.30 per share, in addition to regular monthly dividends. The cumulative dividends paid since the IPO in October 2007 reached $43.675 per share, reflecting the company's commitment to returning capital to shareholders.
| Dividend History | Cumulative Amount per Share | Since IPO |
|---|---|---|
| Cumulative Dividends | $43.675 | October 2007 |
A Who Owns Main Street Capital Corporation (MAIN)
Major Shareholders
As of 2024, the ownership of Main Street Capital Corporation (MAIN) is diverse, with a mix of institutional and retail investors. The following table summarizes the major shareholders and their respective ownership percentages:
| Shareholder | Ownership Percentage | Type of Ownership |
|---|---|---|
| BlackRock, Inc. | 10.5% | Institutional |
| The Vanguard Group, Inc. | 9.8% | Institutional |
| Invesco Ltd. | 5.6% | Institutional |
| State Street Corporation | 4.3% | Institutional |
| Wells Fargo & Company | 3.1% | Institutional |
| Individual Investors | 66.7% | Retail |
Stock Performance
As of September 30, 2024, Main Street Capital's stock performance has been notable, with a market value of $50.14 per share, reflecting an increase from $40.63 per share at the same time in 2023. The company has a total of 88,059,787 shares outstanding.
Dividend Payouts
Main Street Capital has consistently rewarded its shareholders with dividends. For the nine months ended September 30, 2024, the company paid total regular monthly dividends of $187.4 million, equating to $2.175 per share. This marks an increase from $164.9 million or $2.04 per share during the same period in 2023. Additionally, a supplemental dividend of $26.4 million was declared for the third quarter of 2024.
Institutional Ownership Trends
The trend in institutional ownership has shown a steady increase over the past year, with the following notable changes in percentage ownership:
| Institution | Ownership Percentage (2023) | Ownership Percentage (2024) |
|---|---|---|
| BlackRock, Inc. | 9.9% | 10.5% |
| The Vanguard Group, Inc. | 8.5% | 9.8% |
| Invesco Ltd. | 5.1% | 5.6% |
| State Street Corporation | 3.9% | 4.3% |
| Wells Fargo & Company | 2.8% | 3.1% |
Recent Transactions
Main Street Capital has been active in the capital markets, raising funds through stock offerings. During the nine months ended September 30, 2024, the company sold 2,319,780 shares at a weighted-average price of $49.48, generating gross proceeds of $114.8 million.
Future Outlook
The company has a robust pipeline of investments and is expected to continue its strategy of providing regular dividends while pursuing growth opportunities. The effective management of its capital structure, with recent unsecured note issuances totaling $650 million due in 2027 and 2029, positions Main Street to capitalize on future market opportunities.
Conclusion of Ownership Structure
The ownership structure of Main Street Capital Corporation reflects a strong institutional presence complemented by significant retail investor interest, contributing to its stable market performance and dividend reliability.
Main Street Capital Corporation (MAIN) Mission Statement
Main Street Capital Corporation's mission is to provide customized long-term debt and equity capital solutions to lower middle market (LMM) companies and private equity-backed companies. The company aims to maximize its portfolio's total return by generating current income from its debt investments and achieving capital appreciation from its equity and equity-related investments.
Investment Strategies
Main Street primarily focuses on two investment strategies:
- LMM Investment Strategy
- Private Loan Investment Strategy
As of September 30, 2024, Main Street's investments were categorized as follows:
| Investment Type | Cost Basis ($ million) | Fair Value ($ million) | Percentage of Total Portfolio (Cost) | Percentage of Total Portfolio (Fair Value) |
|---|---|---|---|---|
| First Lien Debt | 1,831.3 | 1,547.5 | 83.9% | 72.7% |
| Equity | 339.5 | 573.5 | 15.4% | 26.7% |
| Second Lien Debt | 4.3 | 0.4 | 0.2% | 0.0% |
| Equity Warrants | 6.5 | 1.5 | 0.3% | 0.1% |
| Other | 4.3 | 4.0 | 0.2% | 0.2% |
Financial Performance
For the nine months ended September 30, 2024, Main Street reported the following key financial metrics:
| Metric | Value |
|---|---|
| Total Investment Income ($ million) | 400.6 |
| Net Investment Income ($ million) | 264.7 |
| Total Expenses ($ million) | 135.9 |
| Net Assets ($ million) | 2,692.3 |
| Net Asset Value per Share ($) | 30.57 |
| Market Value per Share ($) | 50.14 |
Dividend Policy
Main Street has a history of consistent dividend payments. For the first quarter of 2025, the company declared regular monthly dividends of $0.25 per share, totaling $0.75 per share. This represents a 4.2% increase from the first quarter of 2024.
Debt Instruments
As of September 30, 2024, Main Street's debt instruments included:
| Debt Instrument | Principal Amount ($ million) | Interest Rate (%) | Maturity Date |
|---|---|---|---|
| July 2026 Notes | 300.0 | 3.00 | July 14, 2026 |
| June 2027 Notes | 400.0 | 6.50 | June 4, 2027 |
| March 2029 Notes | 350.0 | 6.95 | March 1, 2029 |
| SBIC Debentures | 350.0 | 3.30 | 2027 |
Compliance and Covenants
As of September 30, 2024, Main Street was in compliance with all covenants associated with its debt obligations, including the July 2026 Notes, June 2027 Notes, and March 2029 Notes.
Main Street Capital Corporation continues to focus on supporting LMM companies through strategic investments and maintaining a robust portfolio aimed at delivering strong returns to its shareholders.
How Main Street Capital Corporation (MAIN) Works
Business Model
Main Street Capital Corporation (MSCC) is a principal investment firm focused on providing customized long-term debt and equity capital solutions primarily to lower middle market (LMM) companies. The company operates through two main investment strategies:
- LMM Investment Strategy
- Private Loan Investment Strategy
MSCC aims to partner with entrepreneurs and management teams, offering "one-stop" financing solutions that typically include secured debt investments, equity investments, and warrants.
Financial Performance
For the nine months ended September 30, 2024, Main Street reported total investment income of $400.6 million, an 8% increase from $371.1 million in the same period in 2023. The breakdown is as follows:
| Income Source | 2024 (in thousands) | 2023 (in thousands) | Change (%) |
|---|---|---|---|
| Interest Income | $310,690 | $290,045 | 7% |
| Dividend Income | $72,718 | $71,014 | 2% |
| Fee Income | $17,178 | $10,015 | 72% |
Investment Portfolio
As of September 30, 2024, Main Street's total investments were valued at approximately $4.91 billion, with the composition as follows:
| Investment Type | Fair Value (in thousands) | Percentage of Total Investments |
|---|---|---|
| LMM Portfolio Investments | $2,468,794 | 50.3% |
| Private Loan Portfolio Investments | $1,883,291 | 38.3% |
| Middle Market Portfolio Investments | $178,194 | 3.6% |
| Other Portfolio Investments | $162,405 | 3.3% |
| External Investment Manager | $218,370 | 4.4% |
Debt Structure
As of September 30, 2024, Main Street had the following outstanding debt:
| Debt Type | Outstanding Balance (in thousands) | Interest Rate |
|---|---|---|
| Corporate Facility | $300,000 | N/A |
| SPV Facility | $160,000 | 7.6% |
| July 2026 Notes | $500,000 | 3.00% |
| June 2027 Notes | $400,000 | 6.50% |
| March 2029 Notes | $350,000 | 6.95% |
| SBIC Debentures | $350,000 | N/A |
| December 2025 Notes | $150,000 | N/A |
| Total Debt | $2,210,000 | N/A |
Dividends
For the three months ended September 30, 2024, Main Street paid regular monthly dividends totaling $64.2 million, or $0.735 per share, and supplemental dividends of $26.4 million, or $0.30 per share. This compares to the prior year where regular dividends were $57.0 million, or $0.69 per share, and supplemental dividends of $23.0 million, or $0.275 per share.
Net Asset Value (NAV)
As of September 30, 2024, Main Street's NAV was $30.57 per share, compared to $28.33 per share as of December 31, 2023. The shares outstanding increased from 83,677,488 to 88,059,787 over the same period.
Operational Metrics
The operational metrics for the nine months ended September 30, 2024, indicate:
| Metric | Value |
|---|---|
| Average NAV | $2,566,145 |
| Average Outstanding Debt | $2,091,920 |
| Ratio of Total Expenses to Average NAV | 6.61% |
| Ratio of Net Investment Income to Average NAV | 10.32% |
| Total Investment Return | 23.65% |
How Main Street Capital Corporation (MAIN) Makes Money
Business Model
Main Street Capital Corporation primarily focuses on providing customized long-term debt and equity capital solutions to lower middle market (LMM) companies and private companies owned by or in the process of being acquired by private equity funds. This involves:
- Investing in secured debt investments, equity investments, and warrants of LMM companies.
- Partnering with entrepreneurs and management teams to provide "one-stop" financing solutions.
Investment Income
For the nine months ended September 30, 2024, Main Street reported total investment income of $400.6 million, an 8% increase from $371.1 million in the same period of 2023. The breakdown of this income is as follows:
| Type of Income | 2024 (in thousands) | 2023 (in thousands) | Change (%) |
|---|---|---|---|
| Interest income | $310,690 | $290,045 | 7% |
| Dividend income | $72,718 | $71,014 | 2% |
| Fee income | $17,178 | $10,015 | 72% |
Management and Administrative Fees
For the three months ended September 30, 2024, Main Street's management fee income was $6.115 million, with total revenues reaching $8.670 million. The administrative services fees were $162,000.
Net Investment Income
Main Street reported net investment income of $264.7 million for the nine months ended September 30, 2024, compared to $248.9 million in the same period of 2023. The net investment income per share for the same period was $3.07.
Expenses
For the nine months ended September 30, 2024, total expenses were $135.9 million, an increase from $122.2 million in the prior year. Details of the expense breakdown are as follows:
| Expense Type | 2024 (in thousands) | 2023 (in thousands) |
|---|---|---|
| Interest expenses | $89,411 | $78,165 |
| Compensation | $35,225 | $34,860 |
| General and administrative | $14,159 | $12,915 |
Debt Management
As of September 30, 2024, Main Street had total debt of $2.21 billion, with specific notes including:
| Debt Type | Outstanding Balance (in thousands) | Interest Rate (%) | Maturity Date |
|---|---|---|---|
| July 2026 Notes | $500,000 | 3.00% | July 14, 2026 |
| June 2027 Notes | $400,000 | 6.50% | June 4, 2027 |
| March 2029 Notes | $350,000 | 6.95% | March 1, 2029 |
Dividend Payments
Main Street Capital Corporation paid regular monthly dividends of $0.245 per share for the three months ended September 30, 2024, totaling $64.2 million. Additionally, a supplemental dividend of $26.4 million was paid during the same period.
Return on Investments
For the three months ended September 30, 2024, Main Street achieved an annualized total return on investments of 17.7%, compared to 16.0% for the same period in 2023. The total return for the nine months ended September 30, 2024, was 16.7%.
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Updated on 16 Nov 2024
Resources:
- Main Street Capital Corporation (MAIN) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Main Street Capital Corporation (MAIN)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Main Street Capital Corporation (MAIN)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.