Company Overview
Virtus Convertible & Income Fund II functions as a closed-ended fixed income mutual fund designed to invest primarily within the United States fixed income markets. This financial services entity operates specifically within the asset management industry, providing specialized investment vehicles for capital preservation and income generation. The company manages assets under the leadership of Allianz Global Investors Fund Management LLC, with co-management support from Allianz Global Investors U.S. LLC. Currently, the fund holds a market capitalization of $249.28M and generates annual revenue of $17.60M, though the employee count is not publicly disclosed. The market cap of $249.28M indicates a mid-sized position within the broader asset management sector, while the revenue figure suggests a focused operational scope typical of specialized closed-end funds rather than broad mutual fund complexes.
Financial Health
The fund reports trailing twelve-month revenue of $17.60M alongside net income of $45.32M, while EBITDA data is not available for this specific reporting period. The substantial gap between revenue of $17.60M and net income of $45.32M reveals a highly efficient cost structure where operating expenses are negligible relative to the income generated from the fund's holdings. Free cash flow stands at $1.31M, indicating that the company generates positive cash flow after capital expenditures, which provides a baseline for financial flexibility despite the low absolute amount. The gross margin is recorded at 100.0%, which signifies that the cost of goods sold or direct investment costs are effectively zero or fully absorbed, a characteristic common in asset management fee structures. The operating margin is 81.0%, demonstrating high operational efficiency before interest and taxes, while the profit margin reaches an exceptional 291.6%, reflecting the leverage inherent in the fund's business model. Total cash on hand is $8.13M, whereas total debt stands at $46.81M, creating a net debt position that is significant relative to the cash balance. The debt-to-equity ratio is 12.37, indicating a highly leveraged balance sheet typical of closed-end funds that utilize debt financing to amplify returns for shareholders. The current ratio is 0.42, suggesting that short-term liquid assets are less than half of current liabilities, which points to a liquidity structure heavily reliant on long-term funding sources or the nature of the underlying fixed income portfolio. Return on equity is 13.9%, showing that management effectively utilizes shareholder equity to generate returns, while return on assets is 2.1%, which reflects the yield characteristics of the underlying fixed income assets relative to the total asset base.
Valuation Assessment
The trailing twelve-month P/E ratio is 1.20, while the forward P/E ratio is not available for calculation or disclosure. The absence of a forward P/E prevents a direct comparison regarding expected earnings trajectory, though the low trailing P/E suggests the stock is priced at a fraction of its annual earnings. The price-to-book ratio is 0.92, indicating that the market values the fund at slightly less than its book value, which often occurs in fixed income funds where net asset value serves as a primary valuation anchor. The price-to-sales ratio is 14.16, a metric that is elevated relative to typical asset management firms but may be distorted by the low revenue base compared to the high net income. EV/EBITDA is not available, so alternative valuation metrics must rely on the price-to-book and price-to-sales figures to assess relative valuation. The 52-week high is $14.99 and the 52-week low is $10.23, establishing the trading range within which the asset has fluctuated over the past year. Without the specific current share price listed in the provided facts, the exact percentage position relative to the 52-week high or low cannot be calculated, but the range defines the volatility boundaries for the investment. The beta is 1.19, which implies that the fund's price volatility is 19% higher than the broader market benchmark, suggesting it reacts more sharply to market movements than large-cap equities.
Growth & Income
Revenue growth year-over-year is -3.5%, while earnings growth year-over-year is -6.9%, indicating that earnings are declining at a faster rate than revenue, which can occur when the fund size contracts or fees decrease. The dividend yield is 11.0%, which is exceptionally high for the asset management sector and serves as the primary income driver for investors. The payout ratio is 13.2%, meaning that only a small fraction of net income is distributed as dividends, while the majority is retained within the fund's structure. Given the high payout ratio relative to the total income, the dividend is supported by the strong profit margin, but the low absolute payout suggests the fund retains most earnings for operations or debt service. The overall growth profile shows contraction in both revenue and earnings, while the income profile is characterized by a very high yield derived from the leveraged structure and low operating costs.