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Buy this BDC for Rising Earnings and a 11% Dividend Yield

Rising earnings estimates on the back of strong second quarter results – including a 48.2% earnings surprise – have helped TICC Capital Corp (NASDAQ: TICC) achieve a Zacks #1 Rank (Strong Buy) on August 30.  Moreover, this non-diversified management investment company has delivered an average surprise of 28.2% over the past four quarters.

With a solid year-to-date return of 20% and a history of beating quarterly earnings estimates, this stock offers an attractive investment opportunity.

Better-than-expected second-quarter earnings and steady improvement in investment portfolio are the primary rank drivers for this stock.  Moreover, continued improvement in investment income will help improve its profitability in the upcoming quarters.

On August 20, TICC CAPITAL completed an underwritten public offering of 3,450,000 shares of its common stock at a public offering price of $9.65 per share for total estimated gross proceeds of $33.3 million.  This capital will serve as growth for investments in the coming quarters.

On July 30, TICC Capital reported second-quarter 2012 net investment income of 40 cents per share, outpacing the Zacks Consensus Estimate of 27 cents by 48.2% and the year-ago earnings of 29 cents by 37.9%.

Total investment income of $20.5 million surged 83.8% from the year-ago quarter. Significantly higher (almost 87%) total investment income from non-affiliated/non-control investments was primarily responsible for the surge.

The fair value of TICC Capital’s total investment portfolio was $439.2 million as of June 30, 2012, up 12.2% from $391.5 million as of December 31, 2011. During the second quarter, the company provided approximately $62.1 million debt funding to new and existing portfolio companies.

TICC Capital’s Board of Directors has increased its dividend by 7.4% to $0.29 per share distribution for the third quarter this year, payable on September 28, 2012, to shareholders of record as of September 14, 2012.  TICC Capital had a very strong second quarter, as reflected by their having deployed approximately $62.1 million of capital, consistent with their investment strategy, as well as by their taxable income continuing to equal or exceed dividend distributions.

TICC Capital has a current dividend yield of 11.15%.  TICC Capital has increased its dividend 16% in the last year.

TICC Capital has a 12-month target price of $11.30.

TICC Capital Corp. is a business development company primarily engaged in providing capital to technology-related companies.  TICC concentrates its investments in companies having annual revenues of less than two hundred million dollar and/or a market capitalization or enterprise value of less than three hundred million dollar, with a focus on businesses.

Best Performing High Yield Dividend Stocks in January 2012

The table below shows the best performing high yield dividend stocks for January 2012.  These are stocks with a dividend yield of 3% or higher and a summary equity score of very bullish (9.1 or greater on a 10 point scale).  These stocks are ranked by their price performance in the last 4 weeks, January 2012.   Here are some highlight notes from stocks making the top of the list.

Tessco Technologies (TESS) is highest with a dividend yield of 3.37% in the Electronic Equipment & Instruments industry .  TESS provides products and value-added services in the wireless communications industry.  The Company serves customers in the cellular telephone, personal communication system, paging, and mobile radio- dispatch markets.  TESSCO offers manufacturer brand name products, as well as its own products which are sold under the Wireless Solutions name.  In the past 52 weeks, shares of Tessco Technologies have traded between a low of $10.31 and a high of $17.25 and are now at $17.07, which is 66% above that low price.  Over the last five market days, the 200-day moving average (MA) has gone up 0.6% while the 50-day MA has advanced 1.2%.

Seagate Technology (STX) posted Dec-Q EPS of $1.28, vs. $0.31, beating our $1.02 estimate.  Sales rose 18% to $3.2B on a 24% increase in the average selling price  of hard disk drives due to the industry’s supply/demand imbalance. STX  signed long-term agreements with its major customers. As a result, we  believe hard disk prices will be more stable, but will remain at  slightly higher levels. We also project more cost synergy from the  acquisition of Samsung’s disk drive business. We raise our FY 12 (Jun.)  EPS estimate by $1.04 to $5.34, FY 13’s by $1.76 to $5.83, and our  target price by $8 to $32.

Shares of Cedar Fair (FUN) traded at a new 52-week high $26.31 on February 1 2012.  This new high was reached on approximately average trading volume as 214,000  shares traded hands, while the average 30-day volume is approximately 277,000  shares.  FUN has potential upside of 12.7% based on a current price of $26.18 and analysts’ consensus price target of $29.50.  Cedar Fair shares have support at the 50-day moving average (MA) of $22.82 and additional support at the 200-day MA of $20.44.  Cedar Fair, L.P. owns and operates amusement parks.  The Company’s parks operate under the Cedar Point, Knott’s Berry Farm, Dorney Park & Wildwater Kingdom, Valleyfair, and Worlds of Fun and Oceans of Fun names.  Cedar Fair’s parks are family-oriented theme parks that are located in various areas of the United States.

High yielding Real Estate Investment Trusts (REITs) such as Chimeria Investments (CIM) have performed well in the current economic climate. As reported in The Wall Street Journal, the MSCI U.S. REIT Index returned 8.7% in 2011, more than four times the return of the Standard & Poor’s 500-stock index. REITs are a popular play in the current economy due to their steady dividends. REITs can avoid corporate income tax, provided they invest in real estate-related assets and pay out at least 90 percent of their income in dividends to investors, rather than reinvesting in their business.

Citizens & Northern (CZNC) is one of today’s biggest movers, up 1.9% to $20.99 (January 24 2012).  The Dow is down 0.5% to 12,608 and the S&P is currently down 0.2% to 1,311.  In the past 52 weeks, shares of Citizens & Northern have traded between a low of $13.10 and a high of $21.00 and are now at $20.99, which is 60% above that low price.  Over the last five market days, the 200-day moving average (MA) has gone up 0.3% while the 50-day MA has advanced 1.3%.  Based on a current price of $20.99, Citizens & Northern is currently 16.6% above its average consensus analyst price target of $17.50.  The stock should find initial support at its 50-day moving average (MA) of $17.91 and further support at its 200-day MA of $16.20.  Citizens & Northern Corporation is a holding company for Citizens & Northern Bank and First State Bank.  The Banks provide a full range of banking services, including deposit and loan products for personal and commercial customers, and trust services and insurance products.  Citizens & Northern operates in north central Pennsylvania.

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