TSLXSixth Street Specialty Lending (TSLX) presents a compelling investment case with strong fundamental performance, high dividend yield, and positive long-term trends in specialty lending. While current technicals suggest a pause or slight pullback, its overall financial health and market position warrant a 'Buy' recommendation.
TSLX operates within the specialty lending sector, which benefits from increased demand for flexible financing solutions for middle-market companies. Trends in private credit and direct lending are favorable, though regulatory shifts in financial services could present moderate headwinds.
TSLX demonstrates strong profitability, robust revenue generation, and a solid balance sheet. The company consistently beats earnings estimates and maintains a high dividend yield, underscoring its financial strength and shareholder return strategy. Its P/E ratio is within a reasonable range given its sector and performance.
TSLX is trading within a stable range, showing some signs of downward momentum on shorter timeframes but remaining above key long-term support levels. The current technical indicators suggest a neutral stance with potential for sideways movement or a slight retracement.
| Factor | Score |
|---|---|
| Private Credit Growth | 85 |
| Interest Rate Sensitivity | 75 |
| Regulatory Landscape | 60 |
| Middle Market Focus | 70 |
| Factor | Score |
|---|---|
| Valuation | 75 |
| Profitability | 95 |
| Growth | 40 |
| Balance Sheet Health | 70 |
| Cash Flow & Dividends | 95 |
| Earnings Performance | 70 |
| Factor | Score |
|---|---|
| Trend Analysis | 70 |
| Momentum | 55 |
| Volume | 60 |
| Support & Resistance | 70 |
Consistent EPS Beats
The company has exceeded earnings per share (EPS) estimates in the last 5 out of 8 reported quarters, indicating a track record of delivering better-than-expected profitability.
Attractive P/E Ratio
The trailing Price-to-Earnings (P/E) ratio of 12.91 is below the industry average, suggesting the stock may be undervalued relative to its earnings potential.
Missed EPS Estimates
The company missed EPS estimates in Q2 2024 (-1.28% surprise) and Q4 2022 (-3.72% surprise), indicating potential challenges in meeting profit expectations.
High Price-to-Sales Ratio
The Price-to-Sales (P/S) ratio of 13.4 (TTM) is high, suggesting that the market is valuing the company's revenue generation significantly, which could be a risk if growth falters.
June 2025
16
Ex-Dividend Date
June 2025
30
Next Dividend Date
July 2025
31
Next Earnings Date
H: $0.55
A: $0.53
L: $0.50
H: 114.00M
A: 110.42M
L: 106.30M
Sixth Street Specialty Lending, Inc. (NYSE: TSLX) is a business development company. The fund provides senior secured loans (first-lien, second-lien, and unitranche), unsecured loans, mezzanine debt, and investments in corporate bonds and equity securities and structured products, non-control structured equity, and common equity with a focus on co-investments for organic growth, acquisitions, market or product expansion, restructuring initiatives, recapitalizations, and refinancing. The fund invests in business services, software & technology, healthcare, energy, consumer & retail, manufacturing, industrials, royalty related businesses, education, and specialty finance. The fund seeks to finance and lending to middle market companies principally located in the United States. The fund invests in companies with enterprise value between $50 million and $1 billion or more and EBITDA between $10 million and $250 million. The transaction size is between $15 million and $350 million. The fund invests across the spectrum of the capital structure and can arrange syndicated transactions of up to $500 million and hold sizeable positions within its credits.
23.20 USD
The 39 analysts offering 1 year price forecasts for TSLX have a max estimate of 25.00 and a min estimate of 21.00.