📊 SCM Key Takeaways
Is Stellus Capital Investment Corp (SCM) a Good Investment?
Stellus Capital Investment Corp is experiencing significant fundamental deterioration with net income declining 41% YoY and EPS down 46.9%, coupled with distressed returns on equity (0.5%) and assets (0.2%) indicating severe capital inefficiency. While positive operating cash flow provides some cushion, the combination of declining profitability, minimal cash reserves ($3.4M against $1.0B assets), and weakness across all earnings metrics suggests the investment portfolio is underperforming and shareholder value is eroding.
Stellus Capital Investment Corp Key Strengths (SCM)
- Positive operating cash flow of $22.8M with 102.5% FCF margin demonstrates ability to generate cash despite earnings pressures
- Conservative capital structure with 0.00x debt-to-equity ratio indicating controlled leverage
- Recent insider activity with 3 Form 4 filings in last 90 days suggests some management engagement
SCM Stock Risks: Stellus Capital Investment Corp Investment Risks
- Net income collapsed 41% YoY and EPS declined 46.9% YoY indicating rapid deterioration in investment portfolio performance and shareholder returns
- Critically low ROE (0.5%) and ROA (0.2%) reveal severe capital inefficiency and inability to generate adequate returns on shareholder equity
- Severe liquidity mismatch with only $3.4M cash against $1.0B asset base creates redemption and distribution payment risk for an investment company
- Declining revenue (-2.1% YoY) suggests the investment portfolio is shrinking or underperforming
Key Metrics to Watch
- Quarterly net income and EPS trends to confirm if decline is stabilizing or accelerating
- Return on equity and return on assets improvements toward industry-appropriate levels (>5% ROE minimum)
- Operating cash flow sustainability and cash position to assess distribution capacity
- Form 4 insider activity patterns for signs of confidence or distress from management
Stellus Capital Investment Corp (SCM) Financial Metrics & Key Ratios
💡 AI Analyst Insight
The 102.5% free cash flow margin provides substantial flexibility for dividends, buybacks, and strategic investments. The current ratio below 1.0x warrants monitoring of short-term liquidity.
SCM Profit Margin, ROE & Profitability Analysis
SCM vs Market Sector: How Stellus Capital Investment Corp Compares
How Stellus Capital Investment Corp compares to Market sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Stellus Capital Investment Corp Stock Overvalued? SCM Valuation Analysis 2026
Based on fundamental analysis, Stellus Capital Investment Corp has mixed fundamental signals relative to the Market sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Stellus Capital Investment Corp Balance Sheet: SCM Debt, Cash & Liquidity
SCM Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Stellus Capital Investment Corp's revenue has remained relatively flat over the 5-year period, with a 0% decline. The most recent EPS of $0.80 reflects profitable operations.
SCM Revenue Growth, EPS Growth & YoY Performance
Stellus Capital Investment Corp Dividends, Buybacks & Capital Allocation
SCM SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Stellus Capital Investment Corp (CIK: 0001551901)
📋 Recent SEC Filings
❓ Frequently Asked Questions about SCM
What is the AI rating for SCM?
Stellus Capital Investment Corp (SCM) has an AI grade of C with 75% confidence, based on fundamental analysis of SEC EDGAR filings.
What are SCM's key strengths?
Claude: Positive operating cash flow of $22.8M with 102.5% FCF margin demonstrates ability to generate cash despite earnings pressures. Conservative capital structure with 0.00x debt-to-equity ratio indicating controlled leverage.
What are the risks of investing in SCM?
Claude: Net income collapsed 41% YoY and EPS declined 46.9% YoY indicating rapid deterioration in investment portfolio performance and shareholder returns. Critically low ROE (0.5%) and ROA (0.2%) reveal severe capital inefficiency and inability to generate adequate returns on shareholder equity.
What is SCM's revenue and growth?
Stellus Capital Investment Corp reported revenue of $22.3M.
Does SCM pay dividends?
Stellus Capital Investment Corp pays dividends, with $10.4M distributed to shareholders in the trailing twelve months.
Where can I find SCM SEC filings?
Official SEC filings for Stellus Capital Investment Corp (CIK: 0001551901) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is SCM's EPS?
Stellus Capital Investment Corp has a diluted EPS of $0.06.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined grade reflects both perspectives for balanced insights.
What is SCM's fundamental grade?
Based on our AI fundamental analysis in May 2026, Stellus Capital Investment Corp has a C grade with 75% confidence. Review the strengths and risks sections above for full context. This is not investment advice.
Is SCM stock overvalued or undervalued?
Valuation metrics for SCM: ROE of 0.5% (sector avg: 15%), net margin of 7.4% (sector avg: 12%). Compare these metrics with sector averages to assess valuation.
What is SCM's AI grade for 2026?
Our dual AI analysis gives Stellus Capital Investment Corp a combined C grade for 2026. Revenue is data pending, with profitability at or below sector average. Always conduct your own research.
What is SCM's free cash flow?
Stellus Capital Investment Corp's operating cash flow is $22.8M, with capital expenditures of N/A. FCF margin is 102.5%.
How does SCM compare to other Market stocks?
Vs Default sector averages: Net margin 7.4% (avg: 12%), ROE 0.5% (avg: 15%), current ratio N/A (avg: 1.8).