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Verdict
Quantitative factor alignment verified for current market regime.
Quant Score
Rank
#3274
Positioning
Market Dominance
Financial
Financial Services
$367M
Rob T. Ladd
Stellus Capital Investment Corporation is a business development company specializing in investments in private middle-market companies. The fund prefers to invest in US and Canada.
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X-AXIS: EV/EBITDA (LOWER = CHEAPER) | Y-AXIS: ROE (HIGHER = ELITE) | RED CIRCLE = SCM ANALYSIS TARGET
| Stock | Rating | Score▼ | Quality | Value | Momentum | P/E | EV/EBITDA | ROE | ROA | Gross Mgn | Op Mgn | Net Mgn | Rev Growth | Div Yield | D/E | Mkt Cap | AUDIT |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
$GBDC GOLUB CAPITAL BDC, Inc. | 64 | 91 | 89 | 57 | 22.5x | 6.6x | 5.7% | 1.7% | 100.0% | 64.3% | 25.4% | 116.4% | 12.6% | 128.0x | $3.7B | VS | |
$SAR SARATOGA INVESTMENT CORP. | 55 | 30 | 69 | 85 | 1.4x | 2.3x | 43.6% | 22.2% | - | - | 182.5% | -10.7% | 17.0% | 263.0x | $362M | VS | |
$CGBD Carlyle Secured Lending, Inc. | 53 | 72 | 67 | 40 | 14.2x | 6.1x | 6.8% | 2.0% | 100.0% | 73.2% | 24.8% | 18.0% | 13.6% | 111.0x | $911M | VS | |
$BBDC Barings BDC, Inc. | 53 | 25 | 31 | 79 | 23.4x | 10.1x | 9.8% | - | - | - | - | -103.3% | 13.6% | 139.0x | $921M | VS | |
$SLRC SLR Investment Corp. | 52 | 33 | 47 | 75 | 8.9x | 8.7x | 9.2% | 3.6% | - | - | 60.5% | 3.7% | 10.7% | 115.0x | $834M | VS | |
$TRIN Trinity Capital Inc. | 51 | 26 | 29 | 90 | 9.8x | 52.5x | 14.6% | 9.6% | - | - | 49.8% | 16.0% | 13.2% | 118.0x | $1.1B | VS | |
$CSWC CAPITAL SOUTHWEST CORP | 51 | 29 | 36 | 93 | 9.6x | 10.0x | 14.5% | 6.2% | - | - | 53.5% | 18.2% | 11.7% | 108.0x | $1.3B | VS | |
$ICMB Investcorp Credit Management BDC, Inc. | 50 | 26 | 26 | 86 | - | - | -22.2% | - | - | - | -49.4% | -76.3% | 23.4% | 177.0x | $38M | VS | |
$FDUS FIDUS INVESTMENT Corp | 50 | 31 | 41 | 64 | 9.4x | 10.4x | 11.3% | 6.3% | - | - | 48.5% | 17.9% | 11.2% | 75.0x | $717M | VS | |
$GAIN GLADSTONE INVESTMENT CORPORATION\DE | 49 | 30 | 27 | 90 | - | - | 9.5% | 23.6% | - | - | 423.3% | 3.9% | 10.8% | 96.0x | $551M | VS | |
$SCM Stellus Capital Investment Corp | 42 | 39 | 42 | 43 | 8.2x | 9.6x | 9.9% | 3.6% | 100.0% | 32.1% | 37.4% | -0.6% | 12.4% | 172.0x | $367M | ||
| SECTOR BENCH | - | - | - | - | - | 9.8x | 9.5x | 6.8% | 3.5% | 100.0% | 54.7% | 49.2% | -14.5% | 13.3% | 1.2x | - | REF |
Stellus Capital Investment Corp (SCM) receives a "Reduce" rating with a composite score of 42.0/100. It ranks #3274 out of 7,333 stocks in our coverage universe and carries a 2-star rating. Ratings are driven by a 6-factor quantitative model measuring quality, value, momentum, investment, stability, and short interest.
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No analyst ratings for SCM.
View All RatingsVerified SEC Filings Aggregate • SCM
Direct unfiltered access to 10-K, 10-Q and 8-K filings for SCM.
Open Regulatory DossierFigures adjusted for stock splits and restatements where applicable.
TTM (Trailing Twelve Months) data updates within 48 hours of quarterly filings.
YOY expansion rate
Core pricing power
Operating efficiency
Equity efficiency
Financial leverage
Direct cash return
In-line with peers — no strong momentum signal
Fair valuation relative to peers
Average quality profile
Average volatility — neutral timing signal
Aggressive spending — empire-building risk, dilutive growth
Mid-range overall rating
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| Factor | Global | Sector | Tilt |
|---|---|---|---|
| PROFITABILITY | 39 | 92 | -53DRAG |
| MOMENTUM | 43 | 35 | +8ALPHA |
| VALUATION | 42 | 54 | -12DRAG |
| INVESTMENT | 28 | 27 | +1NEUTRAL |
| STABILITY | 53 | 62 | -9DRAG |
| SHORT INT | 48 | 49 | -1NEUTRAL |
Global = full universe. Sector = relative to industry peers. Positive tilt indicates idiosyncratic strength.
ROIC 1.1% vs WACC 3.2% (spread -2.1%)
GM 100% vs sector 100%, OM 32% vs sector 55%
Capital turnover 0.04x
Rev growth -1%, 4yr history
Interest coverage 44.9x, Net debt/EBITDA 84.2x
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation and elite competitive moats.
Profit generated per dollar of shareholder equity
Our uncertainty rating tracks the predictability of future cash flows and potential for permanent capital loss. Moderate visibility with standard industry cyclicality.
We rate Stellus Capital Investment Corp (SCM) as a Reduce with a composite score of 42.0/100 at a current price of $10.45. The quantitative profile shows weakness across multiple dimensions, suggesting limited upside potential.
Stellus Capital Investment Corp holds a mid-tier position (#20 of 38) within the Financial sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 42.0/100 places it at rank #3274 in our full universe.
No Moat
Medium
Standard
Fair Value
Gross margins of 100% signal strong pricing power.
Stable competitive position in a defensive sector.
Leverage of 172% D/E amplifies downside risk.
Vulnerability to macroeconomic shocks and interest rate volatility.
Stellus Capital Investment Corp represents a reduce based on multi-factor quantitative performance.
Stellus Capital Investment Corp receives a Reduce rating from our analysis, with a composite score of 42.0/100 and 2 out of 5 stars, ranking #3274 out of 7,333 stocks. SCM's factor profile shows weakness across multiple dimensions, suggesting the stock may underperform going forward. Existing holders may want to consider trimming positions or tightening stop-losses.
SCM's quality score of 39/100 is below average, suggesting challenges with profitability or capital efficiency. The company reports a return on equity of 9.9% (sector avg: 6.8%), gross margins of 100.0% (sector avg: 100.0%), net margins of 37.4% (sector avg: 49.2%). Investors should examine whether management is actively addressing these weaknesses or if they reflect structural industry headwinds.
With a value score of 42/100, SCM appears somewhat expensive relative to its fundamentals. Key valuation metrics include a P/E ratio of 8.15x, an EV/EBITDA of 9.55x, a P/B ratio of 0.80x. Investors paying a premium here are likely betting on above-average growth or margin expansion to justify current prices.
Stellus Capital Investment Corp's investment score of 28/100 suggests limited reinvestment activity. Key growth metrics include revenue growth of -0.6% vs. a sector average of -14.5% and a return on assets of 3.6% (sector: 3.5%). While this can be positive for mature, cash-generative businesses returning capital to shareholders, it may also signal a lack of growth opportunities or management conservatism.
SCM is currently showing below-average momentum at 43/100, which may indicate weakening institutional interest or negative sentiment shifts. Revenue growth stands at -0.6% year-over-year, while a beta of 0.61 reflects its sensitivity to broader market moves. Investors should note that declining momentum can precede further price weakness, though contrarian opportunities sometimes emerge at these levels.
With a stability score of 53/100, SCM exhibits average financial resilience. Key stability metrics include a beta of 0.61 and a debt-to-equity ratio of 172.00x (sector avg: 1.2x). While the balance sheet is not a major concern, the stock is subject to typical market volatility and may experience sharper drawdowns during risk-off episodes.
The short interest score of 48/100 for SCM suggests somewhat elevated bearish positioning by institutional traders. Specific risk factors include elevated leverage (D/E: 172.00x), small-cap liquidity risk. With a $367M market cap (small-cap), Stellus Capital Investment Corp may experience above-average volatility. Investors should consider whether the short thesis has merit or if it creates a potential short-squeeze opportunity.
Stellus Capital Investment Corp offers an attractive dividend yield of 12.4%, placing it among the higher-yielding stocks in its peer group. This compares to a sector average dividend yield of 13.3%. A yield this high can provide meaningful income, but investors should verify the payout is sustainable by examining the payout ratio, free cash flow coverage, and any history of dividend cuts.
Stellus Capital Investment Corp is a small-cap company in the Financial sector, ranked #20 of 38 in its sector (47th percentile) and #3274 of 7,333 overall (55th percentile). Key comparisons include ROE of 9.9% exceeding the 6.8% sector median and operating margins of 32.1% below the 54.7% sector average. This below-median ranking suggests SCM faces competitive challenges relative to stronger Financial peers.
While SCM currently exhibits a REDUCE profile, superior opportunities exist within the FINANCIAL sector. Our model identifies several "Strong Buy" candidates with higher quality scores and more attractive valuations among direct industry competitors.
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Improvement in Investment (28) would have the largest impact on the composite score.
RANK #20 OF 38 IN FINANCIALS
EV/EBITDA IN LINE WITH SECTOR BENCHMARKS
ROE 45% ABOVE SECTOR MEDIAN (FAVORABLE)
Gross Margin IN LINE WITH SECTOR BENCHMARKS
Relative to Financial Median (N=38)
Relative valuation derived from Financial sector benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Re-calculated daily.
Projection based on user-defined inputs. Re-calculated daily against current market data.
Dates updated upon official exchange announcement.
Synthesized from recent 13F filings, Form 4 insider transactions, and outstanding short interest metrics.
Lower quality and stability scores may indicate governance concerns. Verified against factor-based integrity benchmarks.
No recent insider transactions available for SCM
Institutional cap table data requires verified 13F filing feeds.
Access SEC 13F Dossier →Insider transaction data currently awaiting regulatory verification.
Access SEC Form 4 Dossier →Efficiency of asset utilization
Pricing power and cost efficiency
Core business profitability
Bottom-line profitability
The Quality factor evaluates the persistence and magnitude of realized cash flows. Companies with scores >70 exhibit superior pricing power and structural financial resilience through diverse economic regimes.
Above 50MA
37.18%
Net New Highs
+51081
Birla Carbon today announced a new production line at its carbon black facility in Trecate, Italy. This dedicated line will serve the purpose of finishing and packing of Continua™ Sustainable Carbonaceous Material (SCM), an industry-leading circular material derived from end-of-life tires. With this launch, high-quality and consistent Continua SCM will be available in large volumes, strengthening long-term supply security for Birla Carbon's customers worldwide.
Stellus Capital Investment Corporation (NYSE:SCM) announced a first quarter 2026 regular dividend of $0.34 per share, payable monthly in increments of $0.1133 in February, March, and April 2026. The company's CEO attributed the dividend reduction to the lower interest rate environment.
Stellus Capital (SCM) has become technically an oversold stock now, which implies exhaustion of the heavy selling pressure on it. This, combined with strong agreement among Wall Street analysts in revising earnings estimates higher, indicates a potential trend reversal for the stock in the near term.
After losing some value lately, a hammer chart pattern has been formed for Stellus Capital (SCM), indicating that the stock has found support. This, combined with an upward trend in earnings estimate revisions, could lead to a trend reversal for the stock in the near term.
FS KKR Capital (FSK) delivered earnings and revenue surprises of 2.82% and 1.06%, respectively, for the quarter ended March 2024. Do the numbers hold clues to what lies ahead for the stock?