TCPC - Barings BDC: One Of The Few Deals In The BDC Sector
2024-05-09 00:59:38 ET
Summary
- Barings BDC is a high-quality business development company trading at a discount to NAV of -14.6%, making it an attractive opportunity.
- BBDC's dividend yield is currently at 10.8% and is fully covered by the net investment income.
- BBDC's portfolio is highly diversified and focused on middle market companies, with a low non-accrual rate and a strong track record of managing risk.
- Non-accruals sit at 0.3%, which is much lower than some popular peer BDCs.
Overview
The Business Development Company sector has proved to be one of the best places to have capital allocated during this higher interest rate environment. However, the strong performance of the sector has caused many of the most popular BDCs to trade at premiums to NAV (net asset value) that are significantly higher than what is considered normal. For example, I recently covered Golub Capital ( GBDC ) that is an extremely high quality BDC, but the price sits at such a large premium to NAV that if you'd be adding shares at an all-time high if you started a position here....
Barings BDC: One Of The Few Deals In The BDC Sector