Stellus Capital Investment Corporation

SCM

Asset Management · Financial Services

Price

$7.06

+0.05 (+0.71%)

Market Cap

$204.4M

Exchange

New York Stock Exchange

Winston Score

Winston is curious

Mixed quality — meaningful strengths and weaknesses.

Data as of Jul 28, 2026 · filings through Mar 31, 2026

Share count rising — dilution

+45.5% over 4y

The company has issued more shares over this period, which dilutes each existing shareholder’s stake.

Diluted shares outstanding: 19.5M (2021) → 28.4M (2025)

Stellus Capital Investment Corporation operates as a Business Development Company (BDC), allocating capital to privately-held, mid-sized enterprises. The firm employs various financing structures, including senior secured (first lien), junior secured (second lien), blended (unitranche), and hybrid (mezzanine) debt, frequently complemented by an equity stake. Its geographic investment focus is primarily on opportunities within the United States and Canada. Stellus Capital targets businesses that generate annual Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) ranging from $5 million to $50 million.

Winston Score History

Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+72.2% YoY

YoY Growth Rate

Revenue accelerating

EPS Growth

-68.2% YoY

YoY Growth Rate

Earnings declining

R&D Spend

$0/ year

0.0% of revenue

Below sector average (7%)

Research and development spending

Cash Position

Cash flow positive

$3M cash & investments

Company generates more cash than it spends — no dilution risk from fundraising

Revenue accelerating

Stellus Capital Investment Corporation grew revenue 72% year-over-year and the growth rate is speeding up. That's the kind of momentum growth investors look for — the question is whether margins can follow.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

Every number that matters to educated investors.

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Quality

Gross Margin

77.9%

Premium pricing power — 77.9% gross margin

Operating Margin

45.4%

Excellent — 45.4% operating margin

ROCE

1.1%

Weak — 1.1% return on capital

ROIC between 0% and 5%. They earn a few cents back per dollar invested in the business.

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Growth

Sales YoY

+4.2%

Slow sales growth (4.2% YoY)

EPS YoY

-41.7%

Earnings shrinking (-41.7% YoY)

Earnings per share down more than 10%. Either a bad year, or a real decline.

EPS Consistency

2/8 quarters

Earnings rarely grow — volatile business

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Cash Flow

Cash Conversion

149%

Turns 149% of profit into real cash

FCF Margin

45.8%

Converts sales into free cash efficiently (45.8%)

Free cash flow margin above 20%. Out of every $100 in sales, more than $20 is real cash they keep.

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Stability

Debt / Equity

1.70

Elevated debt (1.70)

Interest Cover

0.96x

Dangerous — barely covers interest (1.0x)

Interest coverage below 1. Their profits don't cover the interest bill.

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Valuation

P/E Ratio (TTM)

8.5x

Attractive valuation — P/E 8.5

P/E under 10. The price tag is small relative to last year's profit.

P/E vs Forward

+1.8

GROWING

Earnings expected to grow — slightly cheaper on forward P/E

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Dividends

Dividend Yield

20.96%

Healthy income — 20.96% yield

Yield above 6% — often a flag the market is pricing in a cut.

Dividend Growth

-19.9%

Dividend cut (-19.9% YoY) — warning sign

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