Raymond James analyst Robert Dodd upgraded Newtek Enterprise Companies (NASDAQ:NEWT) to Market Carry out from Underperform Monday as its earnings outlook brightens and its near-term dividends present assist.
The analyst, although, nonetheless has issues a couple of vital dividend decline after its financial institution conversion.
“We see a muted threat/return at present ranges, however not so muted from present worth ranges as to justify the prior Underperform score going ahead,” Dodd wrote in a be aware to purchasers.
Higher-than-expected Q2 outcomes confirmed robust demand for SBA 7(a) loans. “With premiums of seven(a) more likely to rise with allowable coupons larger, the outlook for NEWT earnings is brighter,” he stated.
As for Newtek’s (NEWT) dividend, the corporate stated it expects to pay a BDC dividend of $1.00-$1.50 per share within the second half of the 12 months vs. $1.40 that it paid within the first half.
Administration continues to hope the financial institution holding firm will happen in Q3 2022, Dodd stated. A few 12 months in the past, Newtek (NEWT) agreed to purchase Nationwide Financial institution of New York Metropolis in its plan to transform to a financial institution holding firm.
Dodd’s Impartial stance aligns with the Quant score of Maintain and with the common Wall Road score.
SA contributor Michael Coppola mentioned the curious case of Newtek Enterprise Companies