Palmer Square Capital: New BDC With Already Attractive Investment Case
Palmer Square Capital BDC was made public just back in January 2024. Even though there is a limited track-record for PSBD as a publicly traded BDC, the fundamentals are already there to support a bullish thesis. In this article I elaborate on the key strengths and some of the drawbacks of PSBD.
Sixth Street Specialty Lending: A 10% BDC Yield For A Recession
Sixth Street Specialty Lending's net funded investment activity declined in 2Q24 due to higher repayments, but it comfortably out-earned its dividend with a 10% yield. The BDC maintains a diversified, high-quality First Lien-focused portfolio with low exposure to cyclical investments, making it a relatively secure investment. Despite a 23% premium to NAV, Sixth Street Specialty Lending's consistent dividend coverage and solid credit profile support a 'Hold' rating.
MSDL: Attractive Entry Point On Lock-Up Expiry In This 11.6% Yielding BDC
MSDL delivered a strong Q2 with a 3.2% total NAV return and a rise in both NAV and NII. The stock trades at an 11.6% yield and a slight discount to book. The valuation rose post-IPO but dipped after the first lock-up expiry; another potential entry point may arise in October.
Belden (BDC) Is a Great Choice for 'Trend' Investors, 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.
3 Lessons Learned From Struggling BDCs After Q2 Earnings
The BDC sector faces headwinds such as spread compression, potential Fed rate cuts, and increased corporate distress. Despite these challenges, BDC market indices like VanEck BDC Income ETF and Putnam BDC Income ETF show only minor corrections. Yet, the small, illiquid nature of the BDC sector means ETFs may not fully capture overall sector dynamics.
Kayne Anderson BDC: A First Look Gets A Hold
Kayne Anderson launched KBDC in late 2021, joining other established firms in the Business Development Corporation investment sector. It went public last spring. KBDC's investment strategy focuses on generating current income through first lien senior secured loans to middle market companies. The firm plans to leverage Kayne Anderson's established loan sourcing channels and underwriting process to achieve its investment objectives.
BDC Weekly Review: Q2 Wrap-Up
We take a look at the action in business development companies through the fourth week of August and highlight some of the key themes we are watching. BDCs were up nearly 1% on the week, partly retracing the early August drop. Over Q2 sector net investment income and portfolio yield were flat or slightly lower while non-accruals rose.
Bargain: Very Undervalued Bonds From Investment Grade Prospect Capital
Prospect Capital is a large investment grade business development company. Its bonds yield around 8% while other large-cap BDC bonds with the same credit rating are yielding around 5.5%. To add to the undervaluation, PSEC has by far the lowest leverage among its large-cap BDC peers, making it extremely safe.
Oaktree Specialty Lending: A Series Of Unfortunate Events For This BDC
Oaktree Specialty Lending had a disappointing quarter with a drop in NAV and investment income, but still eked out a positive total NAV return. The management fee was reduced permanently to 1%, which should drive a 6% rise in net income. The NAV fell by 2.8%, marking the third sizable drop in a row and the eighth drop in the last 10 quarters.
TriplePoint Venture Growth: 25% Dividend Cut, What Now? (Rating Upgrade)
TriplePoint Venture Growth cut its dividend by 25% due to insufficient net investment income and high non-accrual percentages, leading to significant selling pressure on the BDC's shares. The BDC's weak balance sheet quality resulted in a poor distribution coverage profile. The dividend cut, however, should help the BDC improve its distribution coverage going forward. Therefore, my rating upgrade is a hold.
Golub Capital BDC's NAV, Valuation, And Dividend Vs. 14 BDC Peers - Part 1 (Includes Recommendations As Of 8/23/2024)
Part 1 of this article compares GBDC's recent quarterly change in NAV, quarterly and trailing 12-month economic return, NII, and current valuation to 14 BDC peers. Part 1 also performs a comparative analysis between each company's investment portfolio as of 3/31/2024 and 6/30/2024. 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).
Goldman Sachs BDC: Risks Are Growing (Rating Downgrade)
Goldman Sachs BDC's Q2'24 results showed a sharp increase in non-accrual percentage. Despite solid dividend coverage of 1.31x in Q2, growing non-performing loan risks and potential Federal Reserve rate cuts pose challenges for future net investment income. GSBD's valuation is below its 3-year average price-to-NAV ratio, reflecting negative sentiment from the Q2 earnings report.
