Stellus Capital Investment Corporation (SCM) AI Stock Analysis

Stellus Capital Investment Corporation is a business development company focused on investing in private middle-market enterprises, primarily targeting businesses in the United States and Canada with stable EBITDA between $5 million and $50 million. The company supplies capital through first lien, second lien, unitranche, and mezzanine debt financing, which is frequently paired with equity investments. Stellus Capital supports expansion and growth initiatives across multiple industries by applying disciplined underwriting standards, strategic capital deployment, and active portfolio management to generate risk-adjusted returns.

SCM delivered a 5-year revenue CAGR of 20.9% from FY2020 to FY2025. Annual revenue peaked at $82.7M in FY2024 before decreasing 19.1% to $67.0M in FY2025. Over that period, net income declined from $45.8M to $27.0M, resulting in a net margin of 40.4% and diluted EPS of $1.30. In the trailing twelve months, revenue reached $97.1M with a profit margin of 30.7%. For the latest quarter ended June 30, 2026, revenue dropped 13.2% year-over-year, while quarterly earnings grew 57.2%.

As of June 30, 2026, Stellus Capital held $5.1M in cash and short-term investments against total debt of $599.4M, resulting in net debt of $594.3M. Shareholders' equity was $367.0M, yielding a debt-to-equity ratio of 1.63 and a current ratio of 0.95. For FY2025, operating cash flow and free cash flow were both -$24.4M. Cash usage during FY2025 included $45.3M in dividends paid and $308,998 allocated to share buybacks.

SCM trades at a trailing P/E of 6.9x and a forward P/E of 7.5x, both below the US-listed Financial Services median of 12.1x and 10.8x, respectively. Its price-to-sales multiple is 2.1x compared to the peer median of 3.2x, while its EV/EBITDA of 11.7x matches the peer median of 11.7x. Over the past year, the stock fell 32.1%, underperforming the S&P 500 benchmark return of 16.8%.

Stellus Capital pays a monthly dividend with a forward annual dividend of $1.00, representing a dividend yield of 14.16%. The payout ratio stands at 29.4%, and the company has paid dividends for 15 consecutive years. Over the past five years, the dividend grew at an annualized rate of 6.8%. The last ex-dividend date listed is December 31, 2026.

Wall Street coverage includes 1 Strong Buy and 4 Hold ratings. The mean price target is $10.12, representing a 43.4% premium over the last close of $7.06. For the fiscal year ending December 31, 2026, consensus estimates project EPS of $1.04 on revenue of $91.7M, followed by an EPS estimate of $1.04 on revenue of $93.5M for the next fiscal year. The company recorded 0 EPS beats over the last 4 quarters, with next earnings scheduled for November 9, 2026.

This page is an AI-written research summary of Stellus Capital Investment Corporation (SCM). The text was generated on October 30, 2026 from Quotelinks data as of October 16, 2026 (company profile, annual results, latest balance sheet, valuation, price performance and analyst estimates). An automatic check rejects any draft that contains a figure not found in that data. It is not investment advice; verify figures on the linked tabs before making decisions.

Related: SCM income statement, SCM balance sheet, SCM key metrics, SCM analyst forecast, SCM chart. See the SCM stock overview for the latest quote and news.