Sixth Street Specialty: Hold, Sell, Or Double Down? My BDC Battle
TSLX is one of the best BDCs in the game. It has delivered excellent results in Q1, 2025, while most other peers have been struggling. Yet, TSLX investment case is not as straightforward.
BDC Weekly Review: Questions About BDC Income And Price Trends
We take a look at the action in business development companies through the first week of June and highlight some of the key themes we are watching. BDC are flat year-to-date on average, with valuations below historical averages. Net investment income declines are sector-wide, driven by rate changes, not management issues; NII is expected to stabilize as rates have leveled off.
Blue Owl Capital: A Rock Solid High-Yield BDC Play
Blue Owl Capital remains a strong dividend play, with solid net investment income and a 1.08x dividend coverage ratio despite a rise in non-accruals. The recent merger boosted the BDC's portfolio value by 43% year-over-year, driving higher investment income and supporting the dividend. Shares still trade just below net asset value, offering potential upside if Blue Owl maintains high balance sheet quality.
Bain Capital Specialty Finance: I'm Buying This BDC's Investment Grade 11.5% Dividend Yield
BCSF trades at an 11% discount-to-NAV, offering a healthy entry point for investors looking for high-quality private credit exposure. The stock boasts a 10.7% base dividend yield, supplemented by additional payouts of 3 cents per share every quarter. BCSF's investment-grade rating, selective origination, and low leverage provide strong credit quality and defensive positioning.
BDC Weekly Review: Sector ROE Is Too Low, Says Sixth Street Specialty Lending
We take a look at the action in business development companies through the last week of May and highlight some of the key themes we are watching. BDCs posted strong returns in May. TSLX's claims of low sector ROEs are overstated; sector averages mask significant outperformance by select BDCs and better portfolio yields.
Barings BDC: Rising Concerns, But Dividend Should Remain Safe Near-Term (Downgrade)
Barings BDC's dividend appears safe for the near-term, but declining financials and economic uncertainty warrant caution for income investors. Recent earnings showed net investment income fell below dividend coverage, with credit quality and leverage metrics also weakening. Despite attractive discount to NAV and defensive portfolio moves, I recommend waiting for financial and NAV stability before buying.
Golub Capital BDC's NAV, Valuation, And Dividend Versus 11 BDC Peers - Part 1 (Includes Recommendations As Of 5/30/2025)
Part 1 of this article compares Golub Capital BDC's recent quarterly change in NAV, quarterly and trailing 12-month economic return, NII, and current valuation to 11 BDC peers. Part 1 also performs a comparative analysis of each company's investment portfolio as of 12/31/2024 and 3/31/2025. This includes an updated percentage of investments on non-accrual status. I also provide a list of the other BDC stocks I currently believe are undervalued (a buy recommendation), overvalued (a sell recommendation), and appropriately valued (a hold recommendation).
Warning To All BDC Investors
I am increasingly cautious on BDCs due to rising non-accruals, weaker earnings, and looser underwriting amid intense competition for private credit deals. Elevated interest rates are suppressing BDC valuations and making it harder for borrowers to service debt, leading to fewer quality investment opportunities. Dividend coverage is weakening across many BDCs, with higher non-accruals and PIK income threatening the sustainability of distributions investors rely on.
My Top 2 Buy And Hold Forever BDC Picks
BDCs are high-risk assets. It means that buy and hold forever strategy might be suboptimal. Yet, there are exceptions.
BDC Weekly Review: Performance Divergence But No Serious Weakness
We take a look at the action in business development companies through the fourth week of May and highlight some of the key themes we are watching. BDC sector pulled back 2% this week, but remains up 2.5% month-to-date; valuations are about 5% below historic averages. Despite headlines of credit stress, BDC portfolios' interest income continues to offset markdowns and non-accruals, supporting solid total NAV returns.
Why BDC Bulls Should Stay Away From BIZD
There are only 2 ETF options to invest in the BDC segment, and BIZD is one of them. Even though it is the largest and most liquid alternative, it has some notable drawbacks. In this article, I elaborate in more detail on why BIZD is, in my view, a suboptimal choice for investors, who want to go long the BDC land.
Barings BDC: Dividend Cut Risk Is High, I'm Avoiding This One
Barings BDC is a well-established vehicle with one of the longest track records in the sector. The portfolio quality is solid, and certainly better than what could be implied from the 20% discount to NAV. Yet, the base dividend seems unsustainable or at least with no material margin of safety.
