CSWC - Bain Capital Specialty Finance: Discount To NAV And Strong Growth Make It Attractive

2024-02-08 07:00:00 ET

Summary

• Bain Capital Specialty Finance trades at a discount compared to other BDCs due to its short track record and IPO in 2018.
• BCSF has improved its dividend coverage and has been out-earning its dividend, making it an attractive income investment.
• The BDC has a strong balance sheet, no debt maturities until 2026, and investment-grade credit ratings, making it well-positioned for potential economic downturns.
• Although rates will likely remain elevated for the next few months, they are likely to come down sometime in 2024. BCSF could see tighter dividend coverage, similar to before the start of rate hikes.

Introduction

I'm sure I speak for everyone when I say we all love a good sale. Especially when some of your favorite stocks are selling at a discount. With interest rates remaining high for the foreseeable future, it's not easy finding quality business development companies trading at attractive valuations. As an avid BDC investor I've not added to any of my holdings since interest rates have become elevated over the past 24 months or so....

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