Runway Growth Finance Corp. Announces First Quarter Regular Dividend of $0.40 and $0.07 Supplemental Distribution
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Insights
The declaration of a regular cash distribution alongside a supplemental dividend by Runway Growth Finance Corp. indicates a positive cash flow situation and a robust capital allocation strategy. This could be perceived as a sign of strength and confidence in the company's earnings and financial condition. The distribution of $0.40 per share, supplemented by an additional $0.07, represents a tangible return to shareholders and can affect investor sentiment positively.
Furthermore, the company's commitment to distributing substantially all of its available earnings, subject to board discretion, suggests a shareholder-friendly policy. This approach may enhance the attractiveness of the stock to income-focused investors. However, it's crucial to assess the sustainability of such distributions by analyzing the company's earnings quality, payout ratio and growth prospects.
The maintenance of regulated investment company (RIC) status for income tax purposes is a critical aspect of Runway Growth's distribution strategy. This status allows the company to avoid paying corporate income tax on earnings distributed to shareholders. Investors should be aware of the tax implications of these distributions, as they will likely be subject to taxation as ordinary income or qualified dividends depending on individual circumstances and the nature of the earnings.
The existence of an 'opt out' dividend reinvestment plan (DRIP) provides shareholders with the option to automatically reinvest their dividends into additional shares. This can be a tax-efficient way to increase their investment in the company without incurring transaction fees or taxes at the time of reinvestment, though it does not eliminate the tax liability on the dividends.
The introduction of a supplemental dividend, in addition to a regular distribution, could be indicative of Runway Growth's performance relative to its peers. It may signal that the company is outperforming in its sector, which could be a factor in its ability to generate excess cash for distribution. An analysis of industry norms and comparative performance metrics would be essential to understand the context and impact of this announcement.
Investors should consider the potential long-term benefits of reinvesting dividends through the DRIP, such as compound growth, against the need for immediate income. The decision to opt into or out of the DRIP should align with the investor's individual financial goals and risk tolerance.
MENLO PARK, Calif., Feb. 01, 2024 (GLOBE NEWSWIRE) -- Runway Growth Finance Corp. (Nasdaq: RWAY) (“Runway Growth” or the “Company”), a leading provider of flexible capital solutions to late- and growth-stage companies seeking an alternative to raising equity, today announced that its Board of Directors has declared a first quarter 2024 regular cash distribution of
The following shows the key dates of the first quarter 2024 dividend, including the supplemental dividend:
Declaration Date: February 1, 2024
Record Date: February 12, 2024
Payment Date: February 28, 2024
Runway Growth generally intends to distribute, out of assets legally available for distribution, substantially all of its available earnings, on a quarterly basis, subject to the discretion of the Board of Directors. Any distribution by the Company will depend on the Company's earnings, financial condition, maintenance of regulated investment company status for income tax purposes, compliance with applicable business development company regulations and such other factors as the Board of Directors may deem relevant from time to time. The Company also maintains an “opt out” dividend reinvestment plan, as amended, for its stockholders. As a result, if the Company declares a distribution, then stockholders who have not opted out of the dividend reinvestment plan will have their cash dividends automatically reinvested in additional shares of the Company’s common stock.
About Runway Growth Finance Corp.
Runway Growth is a growing specialty finance company focused on providing flexible capital solutions to late- and growth-stage companies seeking an alternative to raising equity. Runway Growth is a closed-end investment fund that has elected to be regulated as a business development company under the Investment Company Act of 1940. Runway Growth is externally managed by Runway Growth Capital LLC, an established registered investment advisor that was formed in 2015 and led by industry veteran David Spreng. For more information, please visit www.runwaygrowth.com
Forward-Looking Statements
Statements included herein may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements other than statements of historical facts included in this press release may constitute forward-looking statements and are not guarantees of future performance, condition or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in Runway Growth’s filings with the Securities and Exchange Commission. Runway Growth undertakes no duty to update any forward-looking statement made herein. All forward-looking statements speak only as of the date of this press release.
IR Contacts:
Stefan Norbom, Prosek Partners, snorbom@prosek.com
Thomas B. Raterman, Acting President, Chief Financial Officer and Chief Operating Officer, tr@runwaygrowth.com
FAQ
What is the regular cash distribution per share declared by Runway Growth for the first quarter of 2024?
What is the supplemental dividend per share declared by Runway Growth for the first quarter of 2024?
What are the key dates for the first quarter 2024 dividend declared by Runway Growth?
What is Runway Growth's approach to distributing its available earnings?
Does Runway Growth have a dividend reinvestment plan for its stockholders?
