Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Apollo Investment Corp. (AINV): The Stats To Know

Tomorrow, Apollo Investment Corp. (NASDAQ:AINV) will release its latest quarterly results. The key to making smart investment decisions on stocks reporting earnings is to anticipate how they’ll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you’ll be less likely to make an uninformed, kneejerk reaction to news that turns out to be exactly the wrong move.

Apollo Investment Corp. (NASDAQ:AINV) is a business development company, taking advantage of favorable tax laws to avoid corporate-level taxation on its portfolio of investments. To reap those tax benefits, Apollo Investment Corp. (NASDAQ:AINV) has to pay out the bulk of its income to shareholders as dividends, and investors have come to rely on its high yields. But will the good times continue for the BDC? Let’s take an early look at what’s been happening with Apollo Investment over the past quarter and what we’re likely to see in its quarterly report.

Stats on Apollo Investment

Analyst EPS Estimate $0.21
Change From Year-Ago EPS 0%
Revenue Estimate $83.66 million
Change From Year-Ago Revenue (1.8%)
Earnings Beats in Past 4 Quarters 2

Source: Yahoo! Finance.

How will Apollo’s earnings fare this quarter?
Analysts haven’t made any changes to their views on Apollo Investment Corp. (NASDAQ:AINV)’s earnings prospects recently, keeping their views unchanged both for the March quarter and for the 2014 fiscal year. The stock has also had somewhat muted movements lately, rising just 5% since mid-February.

Apollo Investment Corp. (NASDAQ:AINV) and other business development companies have attracted the attention of yield-hungry investors who have suffered from falling income from more traditional income-producing investments. By making investments in small companies that typically don’t have access to broader sources of financial capital, Apollo and its peers are able to generate impressive returns. Rival Prospect Capital Corporation (NASDAQ:PSEC) has produced even higher double-digit yields from its willingness to make both debt and equity investments in its portfolio companies. But even for Apollo and peer Ares Capital Corporation (NASDAQ:ARCC), both of which largely restrict themselves to debt and secured loans, attractive yields have appealed greatly to investors.

But Apollo’s business model isn’t without risk. The BDC has more than $1 billion in debt on its balance sheet, most of which is secured by its investment portfolio. As a result, Apollo’s portfolio is effectively leveraged, albeit not nearly as extensively as companies like mortgage REITs that rely largely on leverage to boost income levels from mortgage-backed securities. Apollo Investment Corp. (NASDAQ:AINV) takes steps to protect itself from losses from its investments, but leverage boosts the potential impact of any problems on shareholders. Both Ares Capital Corporation (NASDAQ:ARCC) and Prospect Capital Corporation (NASDAQ:PSEC) also have similar levels of debt on their respective balance sheets.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.