MidCap Financial: 11% Dividend Yield As Apollo Possibly Seeks Sale (Rating Downgrade)

2026-05-13 20:01:00 ET

While MidCap Financial Investment Corporation ( MFIC ) is trading cheaply on the back of a significant discount to net asset value ("NAV"), the BDC faces a rising nonaccrual balance and looks set to be sold by its external manager, Apollo Global Management ( APO ). The safety of the dividend is key, and MFIC last declared a quarterly cash dividend of $0.31 per share , kept unchanged from its prior distribution, and $1.24 per share annualized for an 11.17% dividend yield. This yield looks secure against a fiscal 2026 first-quarter net investment income ("NII") that came in at $0.38 per share to beat the consensus by $0.03. MFIC is currently covering its dividend by 123%, or an 82% payout ratio. The core risk around the BDC centers on NAV, as this has seen sustained weakness, which reduces the attraction of the common shares. There have been back-to-back quarters of NAV slippage on both a nominal and per share basis....

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