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Asset/Investment Management
gladstone.com

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Investments

11

Portfolio Exits

12

About Gladstone Investment Corporation

Gladstone Investment Corporation has two publicly traded affiliate companies that also invest in small and medium-sized companies. The firm invests in senior and subordinated loans of small and mid-sized private businesses and Gladstone Commercial Corporation buys commercial and industrial real estate rented to mid-sized businesses.

Gladstone Investment Corporation Headquarter Location

1521 Westbranch Drive Suite 200

McLean, Virginia, 22102,

United States

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Latest Gladstone Investment Corporation News

Upgrade Your Retirement Portfolio With These 3 Monthly Dividends

Apr 3, 2022

getty Volatility is high, stocks are shaky and there’s a major land war in Europe. So we’ll take a pass on the highflyers, thanks. Give us the monthly dividends instead. Of course, easy enough for us to say. We “retire on dividends” folks have spent years building up a nest egg that would last us forever. Now, it’s time for us to turn this pile of cash into cash flow. I’m talking about dividend payers that will keep on paying no matter what happens around the world. We’ll discuss some elite monthly dividend payers in a moment—the types that will dish us 9.8% per year, paid every 30 days. (That’s $98,000 annually in dividends on a million portfolio, or $49,000 in yield salary on a $500K nest egg.) We’ll get to this trio in a moment. First, let’s appreciate monthlies. High Monthly Dividends = Peace of Mind Most dividends pay once every three months. Problem is, our bills come in monthly. Mortgage? Monthly. Water? Monthly. Car? Monthly. Cable? MORE FOR YOU Every 30 days, we need to pay. No good when we’re getting paid every 90. Enter monthly dividend stocks (and funds), which do exactly what the name suggests—they write out a dividend check each and every month, in line with your average Joe’s responsibilities and commitments. … And that’s it. There’s typically nothing else different about these companies and funds other than how often they serve up cash. Check out the table below. Up top is the dividend schedule for an extremely generous 9.8%-yielding dividend portfolio made up of “normal” stocks. Below that is the income from a trio of dividend stocks and funds yielding the same amount, just delivering it each and every month. Both deliver roughly $49,000 in annual income—not on a million-dollar nest egg, but on a mere $500,000 investment. Dividend Payment Schedule by Month Contrarian Outlook I know which one I would pick, and it’s not because of the extra 20 bucks. But ultimately, what matters most is whether these high-yielding monthly dividend payers aren’t just dividend traps in disguise. After all, what good is a giant yield (monthly or otherwise?) if the checks won’t last? So today, we’ll look at three monthly dividends averaging nearly 10% in yield to see whether any of them make the grade for a reliable retirement portfolio. Gladstone Commercial (GOOD) Dividend Yield: 7.0% Gladstone Commercial (GOOD) is a member of the Gladstone Companies: a group of publicly traded investment vehicles that also includes: Gladstone Investment Corporation (GAIN) Gladstone Land Corporation (LAND) Each of these funds invests in (and buys) lower middle market companies in the commercial and/or farmland real estate space. And each one pays out a monthly dividend. Gladstone Commercial is a real estate investment trust (REIT) that invests in single-tenant and anchored multi-tenant net-leased industrial and office properties. Its portfolio currently consists of 129 properties in 27 states, leased out to 108 different tenants spanning 19 industries. Telecommunications makes up 16% of the portfolio, followed by conglomerate/diversified services and automotive tenants at 13% apiece. Healthcare, manufacturing and building each earn single-digit exposure. The rest of the portfolio is spread across 13 other industries. One of Gladstone’s biggest draws is how active a landlord it is. Rather than just sitting back and collecting rents, its management team will help tenants with everything from upgrading their parking lots to literally expanding buildings. And it even goes a step further: “We create value for our tenants by reducing operating expenses via tax appeals, national purchasing power, sustainability initiatives and energy audits.” I’d be remiss not to point out that GOOD missed on its most recent quarterly revenues. Occupancy also slipped…but to a still-healthy 97.2%, and this is a company that almost never lets occupancy slip below 95.0%. All’s still well. More encouraging is that shares have lost some of their froth of late. This long-time outperformer in the REIT space currently trades for 14 times estimated funds from operations (FFO, a critical REIT profitability metric). That’s not a screaming bargain, but it’s a better current deal than the overpriced REIT sector as a whole. Broadmark Realty Capital (BRMK) Dividend Yield: 9.8% Broadmark Realty Capital (BRMK) is a mortgage REIT (mREIT) , which differs from your garden-variety REIT in that deals in paper rather than physical properties. Specifically, it borrows money at short-term rates to buy bundles of securitized mortgages that in turn drip down cash at (hopefully higher) longer-term rates. The difference between those rates (“net interest income,” or NII) is the mREIT’s profit. But if we’re being accurate, Broadmark isn’t your typical mREIT. BRMK is more of a money lender that specializes in a variety of loans. Its primary business is construction loans, though it also offers heavy rehab/redevelopment loans, land development loans, and bridge financing and construction completion loans. These loans are provided to builders, and most of the time, they’re looking for a quick turnaround, which allows Broadmark to set pretty high rates. You’d think that, in the midst of a booming housing market, that BRMK would be off to the races. And it was, for a moment. In Q2 2020, for instance, BRMK told investors that “COVID-19 has stimulated demand for housing stock at historic levels which is driving residential construction and, in turn, loan growth.” Not bad. Of late, however, the business has been weighed down by non-accruals (typically, loans in which principal and/or interest is at least 90 days past due). That’s likely to weigh on earnings in the short-term, and that—as well as the prospects for rising rates—have in turn hampered the stock, and could keep it anchored for several quarters to come. But keep your eye on the young Broadmark, which came public just a few years ago, in 2019. Non-accruals eventually will be resolved, and if it can get through this rough patch with its monthly dividend still intact, it could be a much more attractive long-term prospect. Eagle Point Credit Company (ECC) Dividend Yield: 12.5% Eagle Point Credit Company (ECC) pays monthly, but it’s a black box, to put it lightly. ECC is a closed-end fund (CEF) —and while I’ll tell you that CEFs are superior to exchange-traded funds (ETFs) for any number of reasons, one way in which they fall short is transparency. CEFs aren’t nearly as forthcoming about their holdings, which means it’s more difficult to peek at what’s inside; you just have to trust the manager knows what they’re doing. On top of that, ECC invests in a particularly murky asset—collateralized loan obligations (CLOs)—that, among other things, makes it difficult to compare to most other types of fixed-income solutions. CLOs are effectively securitized pools of business loans—typically first-lien senior-secured bank loans, though they can include second-lien loans and even unsecured debt. Within the CLOs, there are different tranches of debt with varying risks, as well as an equity tranche. Eagle Point Credit primarily invests in the equity and junior debt tranches. In short, it’s virtually impossible for the average investor to get a clear picture of the underlying portfolio, let alone analyze it. That’s where the trust part comes in. And to management’s credit, they’ve been able to put up much stronger longer-term returns than just about any type of fixed income product out there, in part thanks to a massive yield well above 12%. But it’s no picnic—ECC is rife with volatility, which you can at least partially chalk up to extreme leverage above 30%. It’s expensive, too—not only does the fund charge a whopping 9.7% in annual fees (management, interest and other expenses), but ECC currently trades at 5% above NAV, meaning you’re paying $1.05 on the dollar for this portfolio. Disclosure: none

Gladstone Investment Corporation Investments

11 Investments

Gladstone Investment Corporation has made 11 investments. Their latest investment was in Flight Trampoline Parks as part of their Debt on September 9, 2015.

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Gladstone Investment Corporation Investments Activity

investments chart

Date

Round

Company

Amount

New?

Co-Investors

Sources

9/23/2015

Debt

Flight Trampoline Parks

$8.5M

Yes

1

12/22/2014

Recap

B+T Group

$19.6M

Yes

1

10/2/2014

Debt

Cambridge Sound Management

$20.2M

Yes

1

6/13/2013

Private Equity

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$99M

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10

6/4/2013

Debt

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$99M

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10

Date

9/23/2015

12/22/2014

10/2/2014

6/13/2013

6/4/2013

Round

Debt

Recap

Debt

Private Equity

Debt

Company

Flight Trampoline Parks

B+T Group

Cambridge Sound Management

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Amount

$8.5M

$19.6M

$20.2M

$99M

$99M

New?

Yes

Yes

Yes

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Co-Investors

Sources

1

1

1

10

10

Gladstone Investment Corporation Portfolio Exits

12 Portfolio Exits

Gladstone Investment Corporation has 12 portfolio exits. Their latest portfolio exit was Frontier Packaging on January 06, 2021.

Date

Exit

Companies

Valuation
Valuations are submitted by companies, mined from state filings or news, provided by VentureSource, or based on a comparables valuation model.

Acquirer

Sources

1/6/2021

Management Buyout

5

10/3/2019

Acquired - III

2

5/2/2019

Acq - Fin - II

Undisclosed Investors

1

12/20/2018

Acquired

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10

11/2/2018

Acquired - III

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10

Date

1/6/2021

10/3/2019

5/2/2019

12/20/2018

11/2/2018

Exit

Management Buyout

Acquired - III

Acq - Fin - II

Acquired

Acquired - III

Companies

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Valuation

Acquirer

Undisclosed Investors

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Sources

5

2

1

10

10

Gladstone Investment Corporation Acquisitions

23 Acquisitions

Gladstone Investment Corporation acquired 23 companies. Their latest acquisition was Utah Pacific Bridge & Steel on July 30, 2021.

Date

Investment Stage

Companies

Valuation
Valuations are submitted by companies, mined from state filings or news, provided by VentureSource, or based on a comparables valuation model.

Total Funding

Note

Sources

7/30/2021

$99M

Acquired

1

7/9/2020

Other

$99M

Acq - Fin

4

3/9/2020

Debt

$99M

$0.68M

Acq - Fin

1

7/2/2019

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$99M

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10

12/6/2018

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$99M

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10

Date

7/30/2021

7/9/2020

3/9/2020

7/2/2019

12/6/2018

Investment Stage

Other

Debt

Companies

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Valuation

$99M

$99M

$99M

$99M

$99M

Total Funding

$0.68M

Note

Acquired

Acq - Fin

Acq - Fin

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Sources

1

4

1

10

10

Gladstone Investment Corporation Team

2 Team Members

Gladstone Investment Corporation has 2 team members, including current Chief Executive Officer, David Gladstone.

Name

Work History

Title

Status

David Gladstone

Chief Executive Officer

Current

Terry L. Brubaker

Chief Operating Officer

Current

Name

David Gladstone

Terry L. Brubaker

Work History

Title

Chief Executive Officer

Chief Operating Officer

Status

Current

Current

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