US LNG exports surge but will buyers in China turn up?
On Friday, Zuanic and Associates initiated coverage on Chicago Atlantic BDC (NASDAQ:LIEN) with an Overweight rating, highlighting the company’s strong position in the burgeoning US cannabis industry. Currently trading at $10.17, near its 52-week low of $9.71, the stock has shown resilience with a beta of 0.25. The firm’s analyst underscored LIEN’s potential to capitalize on the capital demand-supply imbalance in the sector and its ability to generate yields in the mid to high teens. InvestingPro data reveals the company has achieved impressive revenue growth of 152% over the last twelve months.
Chicago Atlantic BDC, resulting from the merger of Silver Spike Investment Corp with a roughly $220 million loan book from the private side of Chicago Atlantic, stands out in the market with all loans currently in accrual and being first lien. The analyst pointed out that LIEN is trading at an unwarranted 20% discount to book value, with InvestingPro data confirming a substantial dividend yield of 13.37% and an attractive P/E ratio of 9.03. Additional InvestingPro Tips highlight the company’s strong financial position and market opportunities.
LIEN’s strategic advantage comes from its capacity to lend against borrower cash flows and a diverse array of other collateral types, which allows it to tap into a larger total addressable market compared to other marijuana financial companies that are limited by the availability of borrower’s real estate. The analyst noted that LIEN’s management has disclosed a deal pipeline of approximately $600 million, which is to be allocated across Chicago Atlantic’s platform. The company’s financial strength is evident in its healthy current ratio of 1.97, indicating strong liquidity management.
The company’s financial health is further bolstered by a recently closed $100 million senior secured credit facility and a $15 million cash balance as of the first quarter of 2025. These resources are expected to fuel LIEN’s growth trajectory. With Chicago Atlantic holding a 17% share of all marijuana lending, the merger is set to enhance LIEN’s pipeline and network of deal opportunities.
Zuanic and Associates forecast roughly 30% shareholder returns by the end of 2025, combining a return to par with the dividend yield, as LIEN continues to navigate and expand within the cannabis lending space. For a comprehensive analysis of LIEN’s growth potential and detailed financial metrics, access the full Pro Research Report available exclusively on InvestingPro.
In other recent news, Chicago Atlantic BDC Inc reported a strong performance for the first quarter of 2025. The company announced net investment income of $7.6 million, translating to $0.34 per share. However, gross investment income showed a slight decline, dropping from $12.7 million in the previous quarter to $11.9 million. During this period, Chicago Atlantic BDC closed a new $100 million credit facility, enhancing its liquidity position. The company continues to focus on cannabis and underserved lower middle market lending, with a weighted average yield on debt investments of 16.6%. Despite these positive developments, the stock saw a minor decrease post-earnings release. Analysts from Ladenburg Thalmann noted that the company’s weighted average yield on debt investments is significantly higher than the BDC average. Chicago Atlantic BDC’s management highlighted their strategic focus on disciplined capital deployment and maintaining a quarterly dividend of $0.34.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.