Kayne Anderson BDC: Close To Being My Favorite Defensive BDC Pick
Kayne Anderson BDC, Inc. is a new business development company with an NAV of $1.2 billion, trading at a 3% discount and offering a ~10% dividend yield. Kayne Anderson's portfolio is 98% first-lien senior secured loans backed by private equity sponsors, ensuring high defense and robust credit quality. KBDC boasts the lowest debt-to-equity ratio in the BDC space at 0.52x, with strong NII per share levels covering dividends by 127%.
Main Street Capital: Overpriced 8% BDC Yield
Main Street Capital's 70% NAV premium is excessive, especially when compared to peers like Ares Capital and Blue Owl Capital with better yields and lower NAV multiples. Despite solid dividend pay-out metrics and portfolio growth, MAIN's premium valuation is not justified for passive income investors seeking higher yields. The central bank's anticipated interest rate cuts make BDCs less attractive, and MAIN's 8% yield doesn't warrant its high NAV premium.
BDC Dividend Cut Alert: 2 BDCs That Are Likely To Cut Dividends
The Fed's recent decision to cut the base rates by 50 basis points has created more problems for BDCs, especially for those with weaker portfolios. Lower base rates, inactive M&A markets and higher economic uncertainty are critical factors that for some BDCs might trigger dividend cuts. In the article I elaborate on two BDCs that are very close to cutting their dividends with a high probability of making the announcements together with their Q4, 2024 reports.
BDC Weekly Review: Incentive Fee Structures Will Start To Matter Again
We take a look at the action in business development companies through the third week of September and highlight some of the key themes we are watching. BDCs were flat this week, with GAIN leading the upside due. The impact of the Fed Funds rate cut on BDC income incentive fees will become a key driver of NII differentiation once the policy rate troughs.
2 Lessons From BDCs That Recently Cut Their Dividends
The fears of BDC dividends becoming unsustainable are rising. The primary driver for this is falling interest rates. While I fully appreciate this risk, in my opinion, by being very selective, investors can keep their attractive BDC dividends safe.
The Best BDC To Buy For Fed Rate Cuts
The Federal Reserve's 50 basis point rate cut impacts BDCs, which are sensitive to short-term rate changes, affecting their net investment income. BDCs thrive during rate hikes but face challenges with rate cuts, potentially leading to declining net investment income and increased non-accruals. I take a look at 10 leading BDCs and share my pick for the best one to own in the current environment.
BDC Weekly Review: Private Lenders Are Getting Into The Trading Business
We take a look at the action in business development companies through the second week of September and highlight some of the key themes we are watching. BDCs had a strong week with a nearly 2% total return; sector valuations are close to long-term averages, about 6% below recent peaks. Private lenders like Golub and Apollo are increasingly trading private loans, enhancing income and gaining informational advantages over less adept players.
Recent Price Trend in Belden (BDC) is Your Friend, Here's Why
Belden (BDC) could be a great choice for investors looking to make a profit from fundamentally strong stocks that are currently on the move. It is one of the several stocks that made it through our "Recent Price Strength" screen.
I Made Ares Capital One Of My Top BDC Positions
Ares Capital offers a great risk-to-reward ratio with solid dividend coverage and a slight premium to NAV. The portfolio is well-prepared for further interest rate cuts. I made ARCC one of my Top BDC holdings this week.
Belden Inc (BDC) Hit a 52 Week High, Can the Run Continue?
Belden (BDC) is at a 52-week high, but can investors hope for more gains in the future? We take a look at the company's fundamentals for clues.
Crescent Capital BDC: A Reliable Dividend Payer
Crescent Capital BDC boasts a robust portfolio with a low percentage of high-risk investments, ensuring solid NAV growth and consistent net investment income. CCAP offers an attractive forward dividend yield of 9.64%, rising to nearly 12% with special distributions, supported by a strong NII coverage ratio. Trading at a nearly 10% discount to NAV, Crescent Capital's valuation is justified by its consistent performance and potential for future NAV growth.
Looking For Another Internally Managed BDC? Capital Southwest Will Do The Job
Business Development Companies (BDCs) like CSWC fill financing gaps for smaller businesses, focusing on secured debt and equity investments in lower middle-market entities. CSWC's internally managed structure aligns management and shareholder interests, avoiding external advisory fees and benefiting from a favorable operating expense structure. Despite risks like rising non-accruals and interest rate uncertainty, CSWC remains a top-tier BDC.
