Palmer Square Capital: An Overlooked BDC Worth Considering
Palmer Square Capital BDC Inc. is an underfollowed business development company investing in corporate debt securities, collateralized loan obligations, and structured credit. The BDC's portfolio consists mainly of fixed-rate loans, which generated a net investment income yield of 12.8% in Q1 while maintaining low concentration risk. Despite being relatively new, the BDC shows promising returns from dividends, relative value, and potential excess returns due to asymmetrical market liquidity.
Goldman Sachs BDC: Improvements, But Key Risks Remain
Goldman Sachs BDC: Improvements, But Key Risks Remain
Ares Capital: Keep Riding On Your Winning BDC Bets
Ares Capital is the largest publicly-traded BDC by market cap. ARCC's market leadership is supported by a broader integration into Ares Management's credit platform. Ares Capital's significant scale affords it substantial ability to obtain NAV-accretive deals.
BDC Weekly Review: Valuations Are At Early 2021 Levels
We take a look at the action in business development companies through the third week of June and highlight some of the key themes we are watching. BDCs were flat on the week, with some underperformers due to specific events like lock-up expiry and CFO exit. With valuations at 2021 levels we take a look at the key differences and potential developments.
Logan Ridge Finance: A Small-Cap BDC Worth Considering For Income Generation
Logan Ridge Finance Corp. is a BDC focusing on lower middle-market companies, delivering solid earnings growth and increasing dividend payouts for five consecutive quarters. LRFC's portfolio quality is solid, with a decent first-lien exposure and improving balance sheet, but faces credit quality risks due to smaller size and rising non-accruals. Despite their potential, I currently rate LRFC a hold due to credit quality risks. Additionally, I would wait to see growth in net investment income before buying.
Bain Capital Specialty Finance: Initiating Coverage Of This 11%-Yielding BDC
We initiate coverage of business development company Bain Capital Specialty Finance, Inc., trading at an 11% dividend yield and a 7% discount to book. Bain Capital Specialty Finance is overweight in Aerospace/Defense and High-Tech sectors, with over 80% in first-lien assets. Bain Capital is focused on the core middle-market segment with a median EBITDA of $44m, part of Bain Capital Credit managing $12bn in assets.
Runway Growth Finance: Right Moment To Step Away From This BDC
Runway Growth Finance is a VC-focused BDC for which I issued a bull thesis in December 2023. Since then, RWAY has experienced a rather volatile ride and underperformed the BDC market. In this article, I elaborate on RWAY's Q1, 2024 earnings report and justify my decision to recommend avoiding this BDC now.
Main Street Capital: Still Plenty Of Reasons To Own This BDC
Since the publication of my bullish article on Main Street Capital, the BDC has outperformed the sector. This is a bit of a surprise to me given that my expectation was that MAIN as a de-risked BDC would lag the index in the environment of a beta-push. However, if we assess the recent quarterly results more deeply, we will quickly recognize that it is only logical that MAIN has outperformed the BDC sector.
BDC Weekly Review: Banks Are Refinancing Private Debt
We take a look at the action in business development companies through the second week of June and highlight some of the key themes we are watching. BDCs fell 1% on the week, underperforming the broader income space, with valuations coming off slightly. Banks are regaining financing from private credit lenders, challenging the idea of BDCs taking over syndicated lending.
Barings BDC: An 11% Yield That Has The Makings Of A Great Long-Term Investment
Barings BDC remains an attractive investment with strong fundamentals and performance. They are one of the few high-quality BDCs trading below their NAV with a 20% discount currently. Strong credit quality, NAV growth, and share buybacks make Barings BDC a buy despite risks investing in smaller companies.
Capital Southwest: I Was Wrong About This BDC Gem (Upgrade)
Capital Southwest offers passive income investors a growing investment portfolio with a first lien-focus, and a well-covered 10% dividend yield with potential for dividend hikes. The BDC's strong history of growing dividends, focus on first liens, and the central bank's cautious rate cut approach make it a 'Buy' despite the high premium. Capital Southwest's net investment income growth, solid dividend coverage, and potential for special dividends make it a safe investment with upside potential.
Golub Capital: A 10% Yielding BDC That Remains An Attractive Income Play
Golub Capital's recent pullback in share price gives investors a chance to pick up a quality BDC at a slight premium above NAV. As seen by the BDC's credit quality and dividend coverage, GBDC still remains attractively valued in comparison to some of its peers. This credit quality, robust liquidity, and strong dividend coverage also make Golub Capital BDC an attractive income play.
