Ares Capital: Turning To Hold On My Top BDC Position
Ares Capital: Turning To Hold On My Top BDC Position
BDC Weekly Review: OBDC Consummates Merger, Delivering Alpha To OBDE Holders
We take a look at the action in business development companies through the third week of January and highlight some of the key themes we are watching. BDCs had a strong week with a 3% total return, boosted this year by the unwinding of several Fed rate cuts. Blue Owl Capital Corp's merger with OBDE provided significant alpha opportunities due to OBDE's lower valuation.
Blue Owl Capital: You Can Trust This Top BDC's Double Digit Yield
Blue Owl Capital Corporation is a well-run BDC with a strong portfolio. The firm's recent merger with Blue Owl's other entity, OBDE, should improve the combined company's size, portfolio quality, and deal flow. We believe OBDC's dividend is well covered by strong NII, and noise around the company's portfolio 'Fair Value' can be ignored.
Goldman Sachs BDC: Risky, Yet Likely Worth It
Goldman Sachs BDC's portfolio has diversified sector exposure, with notable changes in exposure to software, health care, and professional services since our last coverage. Despite an earnings miss in Q3, we hold a positive outlook on Q4 revenue and believe a favourable asset-liability spread will lead to a solid EPS figure. The BDC's forward dividend yield of 14%+ could make it a lucrative opportunity if price stability emerges.
Chicago Atlantic BDC: The 9% Yielding BDC Everyone Seems To Forget About
Business Development Companies are essential for dividend-focused portfolios, and I'm contemplating an all-income portfolio with BDCs and high-yield funds. Chicago Atlantic BDC, a cannabis-focused BDC, is a standout option often overlooked but worth considering for its unique market focus. My portfolio is still evolving, but Chicago Atlantic BDC would be a strong addition if I pursue an all-income strategy.
Nuveen Churchill Direct Lending: New BDC On The Block With Potential
I rate Nuveen Churchill Direct Lending (NCDL) as a buy due to its solid dividend coverage, diverse portfolio, discount to NAV valuation, and consistent investment activity. NCDL's portfolio is valued at $2.05B, with 94.3% in floating rate investments, benefiting from higher interest rates but posing borrower sustainability risks. The current dividend yield is 10.7%, with net investment income fully supporting the distribution, providing reliable high-yield income for investors.
BDC Weekly Review: Leveraged Loan Defaults Rise To A 4-Year High
We take a look at the action in business development companies through the second week of January and highlight some of the key themes we are watching. BDCs faced a challenging week with a 2.5% drop, mirroring the broader income space; all BDCs in our coverage fell. US corporate bankruptcies hit their highest level since 2010, driven by high debt servicing costs and falling consumer demand.
Chicago Atlantic BDC: Unique Cannabis Focused BDC With Potential
Chicago Atlantic BDC (LIEN) offers a unique investment focus on the cannabis industry, with 77% of its portfolio in cannabis-related debt investments. Despite a 22% price decline since inception, LIEN boasts a high dividend yield of 12.4%, supported by solid net investment income and a recent 36% dividend raise. LIEN's portfolio is diversified with 23% non-cannabis investments and benefits from senior secured first lien debt, reducing overall risk.
Kayne Anderson BDC: Investment Activity And Share Repurchase Plan Can Lead To Growth
Kayne Anderson BDC offers a high dividend yield of 9.6% and focuses on middle market companies, aiming for high current income and capital appreciation. KBDC's diverse $1.9B portfolio, with no single borrower exceeding 2.2%, minimizes concentration risk and benefits from floating rate investments. Strong financials with net investment income of $0.52 per share and low non-accrual rates highlight management's effective underwriting and portfolio quality.
An 8%+ Retirement Income Cocktail Of: 1 BDC, 1 MLP, And 1 ETF
The usual sweet spot range for high and durable income is 6-8%. Anything above that tends to come with unfavorable financial risk. Yet, by being selective and careful, 8%+ exceptions can be found.
Blue Owl Capital: Overhyped BDC With Mediocre Performance
Blue Owl Capital Corp and Blue Owl Capital Corporation III are new entrants in the BDC market, which is favorable for fixed-income investments. Despite being newcomers, only six out of around 50 publicly traded BDCs have been operating since before the 2007 recession. The investment thesis highlights the potential of Blue Owl Capital in a market with few long-standing players.
Palmer Square Capital: This New BDC Is Aligned For Success
Palmer Square Capital BDC offers a high dividend yield of 11%, making this an attractive pick for income focused investors. PSBD's diversified portfolio, primarily in first lien senior secured debt, reduces risk and capitalizes on the higher interest rate environment. Financials show solid net investment income and low non-accrual rates.
