GSBD - Goldman Sachs BDC: Lock In A High-Quality 12% Yield On The Drop

2024-06-04 03:44:55 ET

Summary

• Goldman Sachs BDC's share price appears to have stabilized after a sell-off in May, making it an attractive investment for dividend investors.
• The company's first lien strategy, variable rate exposure and high distribution coverage ratios make it a solid choice in the BDC sector.
• The lower price-to-NAV ratio and potential revaluation add to the attractiveness of an investment in Goldman Sachs BDC.

I found myself adding to my position in Goldman Sachs BDC ( GSBD ) last week as the company’s share price stabilized after an undeserved sell-off earlier in May. In my opinion, Goldman Sachs BDC’s first lien strategy paired with its ability to consistently deliver high distribution coverage ratios skewed the risk profile further to the upside, especially now that the BDC's shares trade at a lower price-to-NAV ratio. Goldman Sachs BDC also has revaluation potential as the Federal Reserve does not seem too eager to want to lower federal fund rates in the near term, which should benefit the company’s variable rate loans investments!...

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