CSWC - Blackstone Secured Lending Q4: Top Performing BDC But Too Expensive Here
2024-03-14 07:30:00 ET
Summary
- BXSL has outperformed the S&P in total returns with more than 40% compared to the S&P's 28% over the past year.
- This along with their double-digit dividend increase and defensively positioned portfolio has caused their share price to rise to a P/NAV ratio of 1.16x.
- With interest rates expected to decline, I expect their share price to fall to more favorable levels and think BXSL is a buy under $28 a share.
- Additionally, the company has most of its debt investments in floating rate loans at nearly 99%. This could cause dividend coverage to become tighter if Nll falls, which in turn could also cause the share price to decline.
- Despite a strong 2023, the BDC did see a rise in PIK income year-over-year. And this could rise further if the economy falls into a recession.