Cash conversion remains volatile, evidenced by a free cash flow margin contraction to 49.7% in 2025Q2 from 119.4% in mid-2024.
| Metric | TTM | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 | Dec'14 | Dec'13 | Dec'12 |
|---|
| Cash from Operations | 12.73M | 28.14M | 32.02M | 3.92M | 2.83M | 25.83M | 18.94M | 41.75M | 14.52M | 26.91M | 17.93M | 9.94M | 41.69M | 21.2M |
| Operating CF Margin % | - | 65% | 77.75% | 13.67% | 5.09% | 149.44% | 47.42% | 379.93% | 32.59% | 95.48% | 66.9% | 32.92% | 144.35% | 70.07% |
| Operating CF Growth % | 379.76% | -12.13% | 717.31% | 38.65% | -89.06% | 36.32% | -54.62% | 187.54% | -46.04% | 50.1% | 80.35% | -76.16% | 96.66% | - |
| Net Income | 31.97M | 35.58M | 36.96M | 14.26M | 52.81M | 15.33M | 39.01M | 9.59M | 43.58M | 27.24M | 17.28M | 32.76M | 32.18M | 37.7M |
| Depreciation & Amortization | -683.48K | -183K | -46.47K | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Stock-Based Compensation | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Deferred Taxes | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Non-Cash Items | -342.54K | -6.28M | -5.06M | -5.53M | -52.25M | 11.24M | -19.89M | 35.8M | -32.59M | 638.95K | -2.98M | 2.92M | -565.02K | -16.5M |
| Working Capital Changes | -18.22M | -984K | 170.37K | -4.82M | 2.26M | -744.12K | -180.55K | -3.64M | 3.53M | -970.51K | 3.62M | -25.74M | 10.08M | 408.98K |
| Change in Receivables | 744.67K | -3.58M | -1.04M | -1.54M | -1.44M | -417.39K | 589.08K | 500.66K | 777.6K | -203.8K | -489.38K | -585.23K | -175.69K | 408.98K |
| Change in Inventory | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Change in Payables | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Cash from Investing | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Capital Expenditures | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| CapEx % of Revenue | 0% | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Acquisitions | 0 | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Investments | 16.25M | 0 | 372.23M | 0 | 0 | 309.35M | 320.58M | 300.7M | 48.34M | 46.22M | 47.83M | 68.52M | 46.64M | 38.48M |
| Other Investing | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Cash from Financing | -12.87M | -25.8M | -30.38M | -11.84M | -11.53M | -20.1M | -21.96M | -21.83M | -21.58M | -21.55M | -21.46M | -21.27M | -22.74M | -23.15M |
| Debt Issued (Net) | 0 | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Equity Issued (Net) | 0 | 2.56M | 0 | 0 | 0 | 552.23K | 0 | 0 | 2.24M | 0 | 0 | 0 | 0 | 0 |
| Dividends Paid | -34.66M | -31.9M | -26.75M | -19.86M | -19.45M | -20.66M | -24.17M | -23.99M | -23.82M | -23.65M | -23.5M | -23.34M | -25.08M | -22.96M |
| Share Repurchases | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Financing | 21.79M | 38K | -133.61K | 15.21K | -76.15K | 0 | 2.21M | 2.16M | 0 | 2.1M | 2.04M | 2.07M | 2.34M | -193.56K |
| Net Change in Cash | 0 | 2.33M | 1.64M | -7.92M | -8.7M | 5.72M | -3.01M | 19.91M | -7.06M | 5.36M | -3.53M | -11.33M | 18.94M | -1.96M |
| Free Cash Flow | 12.73M | 28.14M | 32.02M | 3.92M | 2.83M | 25.83M | 18.94M | 41.75M | 14.52M | 26.91M | 17.93M | 9.94M | 41.69M | 21.2M |
| FCF Margin % | 30.99% | 65% | 77.75% | 13.67% | 5.09% | 149.44% | 47.42% | 379.93% | 32.59% | 95.48% | 66.9% | 32.92% | 144.35% | 70.07% |
| FCF Growth % | -63.03% | -12.13% | 717.31% | 38.65% | -89.06% | 36.32% | -54.62% | 187.54% | -46.04% | 50.1% | 80.35% | -76.16% | 96.66% | - |
| FCF per Share | 0.62 | 1.38 | 1.58 | 0.20 | 0.14 | 1.28 | 0.94 | 2.09 | 0.73 | 1.36 | 0.91 | 0.51 | 2.15 | 1.10 |
| FCF Conversion (FCF/Net Income) | 0.40x | 0.79x | 0.87x | 0.27x | 0.05x | 1.68x | 0.49x | 4.35x | 0.33x | 0.99x | 1.04x | 0.30x | 1.30x | 0.56x |
| Interest Paid | 651.82K | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Taxes Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Level 3 valuation volatility
As reported in recent financial statements, MCI's operating cash flow to net income ratio has fluctuated significantly, reaching a low of 0.19 in late 2024, which suggests that reported earnings are not consistently translating into realized cash inflows for the fund's investment activities.
The persistent gap between net income and operating cash flow indicates that a substantial portion of the fund's earnings may be non-cash in nature, likely tied to the accrual of interest on private placements. Investors should monitor whether these accruals are eventually realized as cash or if they represent a potential overstatement of distributable income.
Based on the latest quarterly data, MCI's free cash flow margin has contracted to 49.7% in 2025Q2, a sharp decline from the 119.4% observed in mid-2024, reflecting a reduced ability to generate surplus cash relative to the fund's core revenue streams.
This downward trajectory in free cash flow margins warrants further investigation into the underlying credit performance of the private portfolio. The volatility suggests that the fund's cash generation is highly sensitive to the timing of interest receipts and potential credit events within its illiquid holdings.
According to recent SEC filings, MCI experienced a notable working capital outflow of $9.4 million in late 2024, which directly pressured the fund's cash position and highlights the inherent instability in the timing of cash collections from its private debt portfolio.
The erratic nature of these working capital changes suggests that the fund's cash flow is subject to the idiosyncratic payment schedules of its borrowers. Such fluctuations may complicate the fund's ability to maintain a consistent dividend payout without relying on cash reserves or external financing.
As indicated by the provided financial data, MCI's dividend payments of $9.2 million in 2025Q2 significantly outpaced the $4.6 million in operating cash flow, suggesting that the current distribution policy may be unsustainable without drawing down on existing capital or liquidating assets.
The reliance on capital reserves to fund distributions appears to be a growing concern, as the cash flow generated from operations is currently insufficient to cover the dividend. This mismatch may force management to reconsider the payout ratio if the underlying interest income does not stabilize.
Quick answers to the most common questions about buying MCI stock.
Barings Corporate Investors (MCI) generated $28.1M in net cash from operating activities in 2024. This reflects the cash generated directly from core business operations.
Barings Corporate Investors (MCI) generated $28.1M in free cash flow in 2024. Free cash flow is the cash left over after capital expenditures, which can be used to pay dividends, repurchase shares, or pay down debt.
Barings Corporate Investors (MCI) spent $0.0M on capital expenditures in 2024. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
In 2024, Barings Corporate Investors (MCI) returned $31.9M to shareholders via cash dividends. This shows the company's commitment to returning capital to its equity investors.