| Snowflake Score | |
|---|---|
| Valuation | 5/6 |
| Future Growth | 0/6 |
| Past Performance | 3/6 |
| Financial Health | 1/6 |
| Dividends | 4/6 |
TSLX Stock Overview
Sixth Street Specialty Lending, Inc. (NYSE: TSLX) is a business development company.
Sixth Street Specialty Lending Competitors
Price History & Performance
| Historical stock prices | |
|---|---|
| Current Share Price | US$23.99 |
| 52 Week High | US$24.74 |
| 52 Week Low | US$20.16 |
| Beta | 1.19 |
| 1 Month Change | 7.82% |
| 3 Month Change | 2.48% |
| 1 Year Change | 14.29% |
| 3 Year Change | 23.60% |
| 5 Year Change | 26.46% |
| Change since IPO | 49.94% |
Recent News & Updates
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.
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.
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.
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.
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
| TSLX | US Capital Markets | US Market | |
|---|---|---|---|
| 7D | 0.3% | -1.6% | -0.5% |
| 1Y | 14.3% | 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
| TSLX volatility | |
|---|---|
| TSLX Average Weekly Movement | 2.0% |
| Capital Markets Industry Average Movement | 0.7% |
| Market Average Movement | 6.6% |
| 10% most volatile stocks in US Market | 15.9% |
| 10% least volatile stocks in US Market | 2.4% |
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
| Founded | Employees | CEO | Website |
|---|---|---|---|
| 2010 | n/a | Josh Easterly | https://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
| TSLX fundamental statistics | |
|---|---|
| Market Cap | US$1.75b |
| Earnings (TTM) | US$223.44m |
| Revenue (TTM) | US$262.49m |
7.8x
P/E Ratio6.7x
P/S RatioIs TSLX overvalued?
See Fair Value and valuation analysisEarnings & Revenue
| TSLX income statement (TTM) | |
|---|---|
| Revenue | US$262.49m |
| Cost of Revenue | US$0 |
| Gross Profit | US$262.49m |
| Expenses | US$39.05m |
| Earnings | US$223.44m |
Last Reported Earnings
Sep 30, 2021
Next Earnings Date
Feb 17, 2022
| Earnings per share (EPS) | 3.06 |
| Gross Margin | 100.00% |
| Net Profit Margin | 85.12% |
| Debt/Equity Ratio | 88.1% |
How did TSLX perform over the long term?
See historical performance and comparisonDividends
15.0%
Current Dividend Yield58%
Payout RatioValuation
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
| Data | Last Updated (UTC time) |
|---|---|
| Company Analysis | 2022/01/16 23:26 |
| End of Day Share Price | 2022/01/14 00:00 |
| Earnings | 2021/09/30 |
| Annual Earnings | 2020/12/31 |
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.