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TSLX

Sixth Street Specialty LendingNYSE:TSLX Stock Report

Last Price

US$23.99

Market Cap

US$1.8b

7D

0.3%

1Y

14.3%

Updated

16 Jan, 2022

Data

Company Financials +
TSLX fundamental analysis
Snowflake Score
Valuation5/6
Future Growth0/6
Past Performance3/6
Financial Health1/6
Dividends4/6

TSLX Stock Overview

Sixth Street Specialty Lending, Inc. (NYSE: TSLX) is a business development company.

Sixth Street Specialty Lending Competitors

Ares Capital

NasdaqGS:ARCC

US$9.9b

FS KKR Capital

NYSE:FSK

US$6.4b

Prospect Capital

NasdaqGS:PSEC

US$3.4b

Main Street Capital

NYSE:MAIN

US$3.1b

Price History & Performance

Summary of all time highs, changes and price drops for Sixth Street Specialty Lending
Historical stock prices
Current Share PriceUS$23.99
52 Week HighUS$24.74
52 Week LowUS$20.16
Beta1.19
1 Month Change7.82%
3 Month Change2.48%
1 Year Change14.29%
3 Year Change23.60%
5 Year Change26.46%
Change since IPO49.94%

Recent News & Updates

Dec 19

Buy This Inflation Resistant Dividend Monster: Sixth Street

This article discusses why TSLX is my largest holding. TSLX has top-notch management continually focused on returns to shareholders or ROE. TSLX has provided investors with excellent returns over the short and long term. Please see the end of the article for my previous TSLX purchases along with returns for each purchase. The portfolio is mostly secured first-lien in non-cyclical sectors and companies with less or no inflation-related exposure. Higher yield investments such as TSLX will likely become even more attractive in an inflationary environment as investors seek additional income from invested capital.

Dec 07

Sixth Street: An Excellent BDC That Gives You Stocking Stuffers

TSLX has a strong track record of shareholder returns through NAV/share growth, and regular plus special dividends. Management appears to be shareholder-friendly, with a share repurchase program in place should the share price reach a certain level respective to NAV. It maintains a strong balance sheet that's on par with Main Street Capital and has plenty of liquidity to fund its investment pipeline.

Sep 23

7.4% Yield Plus Bonus: Buy Sixth Street Specialty Lending

Sixth Street Specialty Lending is a well-run BDC with a strong track record of shareholder returns. It pays a well-covered regular dividend and special dividends as an added kicker. I highlight why the recent share price weakness is a buying opportunity.

Jul 13

Pound For Pound, Sixth Street Is One Of The Best BDCs Around

Sixth Street, previously known as TPG Specialty Lending, has an extremely impressive track record. This credit manager has historically applied disciplined underwriting, as indicated by an array of statistics. Whether based on good old-fashioned total returns, accounting measures like net investment income ROE, or NAV growth per share… few BDCs can compete.

Jun 21

Bag A 7.6% Yield With Sixth Street Specialty Lending

Sixth Street Specialty Lending is a well-managed BDC that's produced market-beating returns for shareholders since its IPO. It continues to perform well, with a very low non-accrual rate. Its yield on investments has also held up well. I also highlight the dividend, balance sheet, valuation, and other points worth considering.

Shareholder Returns

TSLXUS Capital MarketsUS Market
7D0.3%-1.6%-0.5%
1Y14.3%30.2%13.7%

Return vs Industry: TSLX underperformed the US Capital Markets industry which returned 30.2% over the past year.

Return vs Market: TSLX matched the US Market which returned 13.7% over the past year.

Price Volatility

Is TSLX's price volatile compared to industry and market?
TSLX volatility
TSLX Average Weekly Movement2.0%
Capital Markets Industry Average Movement0.7%
Market Average Movement6.6%
10% most volatile stocks in US Market15.9%
10% least volatile stocks in US Market2.4%

Stable Share Price: TSLX is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 2% a week.

Volatility Over Time: TSLX's weekly volatility (2%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
2010n/aJosh Easterlyhttps://www.sixthstreetspecialtylending.com

Sixth Street Specialty Lending, Inc. (NYSE: TSLX) is a business development company. The fund provides senior secured loans (first-lien, second-lien, and unitranche), unsecured loans, mezzanine debt, and investments in corporate bonds and equity securities and structured products, non-control structured equity, and common equity with a focus on co-investments for organic growth, acquisitions, market or product expansion, restructuring initiatives, recapitalizations, and refinancing. The fund invests in business services, software & technology, healthcare, energy, consumer & retail, manufacturing, industrials, royalty related businesses, education, and specialty finance.

Sixth Street Specialty Lending Fundamentals Summary

How do Sixth Street Specialty Lending's earnings and revenue compare to its market cap?
TSLX fundamental statistics
Market CapUS$1.75b
Earnings (TTM)US$223.44m
Revenue (TTM)US$262.49m

7.8x

P/E Ratio

6.7x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
TSLX income statement (TTM)
RevenueUS$262.49m
Cost of RevenueUS$0
Gross ProfitUS$262.49m
ExpensesUS$39.05m
EarningsUS$223.44m

Last Reported Earnings

Sep 30, 2021

Next Earnings Date

Feb 17, 2022

Earnings per share (EPS)3.06
Gross Margin100.00%
Net Profit Margin85.12%
Debt/Equity Ratio88.1%

How did TSLX perform over the long term?

See historical performance and comparison

Dividends

15.0%

Current Dividend Yield

58%

Payout Ratio

Valuation

Is Sixth Street Specialty Lending undervalued compared to its fair value and its price relative to the market?

27.0%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: TSLX ($23.99) is trading below our estimate of fair value ($32.88)

Significantly Below Fair Value: TSLX is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: TSLX is good value based on its PE Ratio (7.8x) compared to the US Capital Markets industry average (15.9x).

PE vs Market: TSLX is good value based on its PE Ratio (7.8x) compared to the US market (17.4x).


Price to Earnings Growth Ratio

PEG Ratio: TSLX's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: TSLX is good value based on its PB Ratio (1.4x) compared to the US Capital Markets industry average (42.4x).

Future Growth

How is Sixth Street Specialty Lending forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?

-19.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: TSLX's earnings are forecast to decline over the next 3 years (-19.2% per year).

Earnings vs Market: TSLX's earnings are forecast to decline over the next 3 years (-19.2% per year).

High Growth Earnings: TSLX's earnings are forecast to decline over the next 3 years.

Revenue vs Market: TSLX's revenue (7.4% per year) is forecast to grow slower than the US market (9.3% per year).

High Growth Revenue: TSLX's revenue (7.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: TSLX's Return on Equity is forecast to be low in 3 years time (12.1%).

Past Performance

How has Sixth Street Specialty Lending performed over the past 5 years?

13.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: TSLX has a large one-off gain of $102.4M impacting its September 30 2021 financial results.

Growing Profit Margin: TSLX's current net profit margins (85.1%) are higher than last year (59.2%).


Past Earnings Growth Analysis

Earnings Trend: TSLX's earnings have grown by 13.9% per year over the past 5 years.

Accelerating Growth: TSLX's earnings growth over the past year (37.6%) exceeds its 5-year average (13.9% per year).

Earnings vs Industry: TSLX earnings growth over the past year (37.6%) underperformed the Capital Markets industry 86.4%.


Return on Equity

High ROE: TSLX's Return on Equity (17.8%) is considered low.

Financial Health

How is Sixth Street Specialty Lending's financial position?


Financial Position Analysis

Short Term Liabilities: TSLX's short term assets ($32.0M) do not cover its short term liabilities ($66.1M).

Long Term Liabilities: TSLX's short term assets ($32.0M) do not cover its long term liabilities ($1.1B).


Debt to Equity History and Analysis

Debt Level: TSLX's net debt to equity ratio (87.7%) is considered high.

Reducing Debt: TSLX's debt to equity ratio has increased from 72.3% to 88.1% over the past 5 years.

Debt Coverage: TSLX's operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: TSLX's interest payments on its debt are well covered by EBIT (3.9x coverage).


Balance Sheet

Dividend

What is Sixth Street Specialty Lending current dividend yield, its reliability and sustainability?

14.96%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: TSLX's dividend (14.96%) is higher than the bottom 25% of dividend payers in the US market (1.32%).

High Dividend: TSLX's dividend (14.96%) is in the top 25% of dividend payers in the US market (3.44%)


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, TSLX has been paying a dividend for less than 10 years.

Growing Dividend: TSLX's dividend payments have increased, but the company has only paid a dividend for 8 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (58.2%), TSLX's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: TSLX's dividends in 3 years are forecast to be covered by earnings (89.9% payout ratio).

Management

How experienced are the management team and are they aligned to shareholders interests?

7.0yrs

Average management tenure


CEO

Josh Easterly (45 yo)

8.08yrs

Tenure

Mr. Joshua Easterly, also known as Josh, is the Co-Founder, Partner, and Co-President at Sixth Street Partners. He serves as the Co-Chief Investment Officer at Sixth Street Specialty Lending Advisers, LLC...


Leadership Team

Experienced Management: TSLX's management team is seasoned and experienced (7 years average tenure).


Board Members

Experienced Board: TSLX's board of directors are seasoned and experienced ( 10.8 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 8.1%.


Top Shareholders

Company Information

Sixth Street Specialty Lending, Inc.'s employee growth, exchange listings and data sources


Key Information

  • Name: Sixth Street Specialty Lending, Inc.
  • Ticker: TSLX
  • Exchange: NYSE
  • Founded: 2010
  • Industry: Asset Management and Custody Banks
  • Sector: Diversified Financials
  • Implied Market Cap: US$1.754b
  • Shares outstanding: 73.10m
  • Website: https://www.sixthstreetspecialtylending.com

Location

  • Sixth Street Specialty Lending, Inc.
  • 2100 McKinney Avenue
  • Suite 1500
  • Dallas
  • Texas
  • 75201
  • United States

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/01/16 23:26
End of Day Share Price2022/01/14 00:00
Earnings2021/09/30
Annual Earnings2020/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.