ARCC - Blackstone Secured Lending Fund May Be Worth The Premium Yielding 9.54%

2024-05-10 09:00:00 ET

Summary

• Blackstone Secured Lending Fund is gaining attention despite having fewer followers than other BDCs.
• There are risks associated with investing in BXSL, including potential impact from declining interest rates and economic downturns.
• BXSL is backed by Blackstone and has a strong funding profile, well-diversified investments, and a growing dividend, making it an attractive investment option.

The number of times I am asked about the Blackstone Secured Lending Fund ( BXSL ) from the Seeking Alpha community is incredible. BXSL only has 11,230 followers compared to Ares Capital ( ARCC ) having 77,690, and Main Street Capital's (MAIN) 73,140 followers, yet in every Dividend Harvesting Portfolio series ( can be read here ) or business development corporation ((BDC)) article I write I always see comments about BXSL. I have officially added BXSL to the BDCs I track and have spent some time going through its structure and financials. I will admit that I am impressed and that BXSL may be worth the premium it trades for, even after appreciating by 22.70% over the past year. There isn't a lot not to like, especially after the recent FOMC meeting, as we are still operating in a higher for longer rate environment. BXSL delivered a strong Q1 earnings report as they beat the consensus EPS estimates by $0.02 as they came in with $0.96 of non-GAAP EPS. BXSL is now the 3rd largest BDC I track by market cap, and over the past year, it's appreciated by 22.70%, which is substantially more than 2 BDCs I am bullish on. I am not opposed to paying a premium for solid companies, and I have a feeling that over the next several weeks, BXSL will end up in my Dividend Harvesting Portfolio....

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