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.
Golub Capital: Not So Great Q4, But Still A Top BDC For Income
Golub Capital BDC trades at a slight discount to NAV, offering a solid buy opportunity for income-oriented investors despite economic challenges. GBDC's Q4 performance was strong, with adjusted net investment income of $0.47 and manageable non-accruals at 1.2% fair value. The merger with GBDC III boosted both top and bottom lines, and the BDC's well-laddered debt and high first-lien exposure remain attractive.
Trinity Capital: My Favorite BDC Right Now
Trinity Capital offers a diversified asset mix and floating-rate exposure, making it a compelling passive income vehicle in a higher-for-longer rate environment. Consistent dividend coverage and a 14% yield, with potential for a 2% dividend hike in 2Q25, underscore its strong income potential. The BDC's net investment income surged 26% YoY in 3Q24, driven by new originations and higher interest rates, supporting future growth.
Goldman Sachs BDC: Price Drop Creates An Attractive Buying Opportunity
I maintain my buy rating on Goldman Sachs BDC due to its strong dividend coverage, diverse portfolio, and attractive valuation despite recent price declines. GSBD's portfolio is well-constructed, with a focus on first lien senior secured debt. Earnings currently support the 14.7% dividend yield, making it appealing for income investors. The higher interest rate environment has impacted GSBD's portfolio quality, but non-accrual rates have improved, and management continues to invest in new opportunities.
1 Underrated And 1 Overrated BDC Yielding 9%+
The BDC universe is small and a large chunk of it is uninvestable for institutional money managers. This renders the sector susceptible to emotional and unsubstantiated flows that ultimately create dislocations. I share two BDCs that offer yields of around 9.5%.
Golub Capital BDC: Dividends Worth Scooping Despite Further Interest Rate Changes
Golub Capital BDC's conservative portfolio, focusing on first-lien debt, faces challenges from decreasing interest rates but maintains solid dividend coverage. GBDC's diversified borrower base and unique industry focus, with a low non-accrual rate, supports its defensive investment position. As GBDC's regular dividend coverage can withstand a few more cuts, the current regular DPS yield of 10.2% can be considered an attractive risk-to-reward opportunity.
Barings BDC: Portfolio Quality Continues To Weaken (Rating Downgrade)
I am downgrading my rating on Barings BDC due to a slight uptick in non-accruals, lower earnings, and weaker dividend coverage. Despite a 10.7% dividend yield and a well-diversified portfolio, I expect no sizeable dividend raises as net investment income is projected to decrease. The recent 5% price drop presents an entry point, but the NAV decline and higher non-accrual rate raise concerns about future performance.
Dividend Cut Alert: 1 REIT And 1 BDC With Unsustainable Yields
REITs and BDCs are solid asset classes through which to facilitate income-oriented strategies. However, investors have to be still careful of not assuming excessive risks that might lead to unexpected dividend cuts. In this article, I share two high-yielding picks, where, in my view, the chances are high for experiencing a dividend cut in the foreseeable future.
TriplePoint Venture Growth: The Tide May Have Turned (Upgrade)
TriplePoint Venture Growth BDC had a challenging 2024, with a high non-accrual ratio and significant realized losses impacting its stock value and net asset value. Despite these issues, recent improvements in non-accruals and a dividend reset have provided some relief, making TPVG a potential buying opportunity. The tech-focused BDC sector, including competitors like Hercules Capital and Horizon Technology Finance, benefits from a strong capital markets environment, enhancing equity-driven returns.
