BXSL Stock Recent News

Part 1 of this article compares BXSL's recent quarterly change in NAV, quarterly and trailing 12-month economic return, NII, and current valuation to 11 BDC peers. Part 1 also performs a comparative analysis between each company's investment portfolio as of 3/31/2025 and 6/30/2025. This includes an updated percentage of investments on non-accrual status. I also provide a list of the other BDC stocks I currently believe are undervalued (a buy recommendation), overvalued (a sell recommendation), and appropriately valued (a hold recommendation).

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In Q2, most BDCs reported negative earnings growth. Given where interest rates are heading, there will likely be the same situation going forward as well. Since the sector average base dividend coverage is only 102%, it does not bode well for BDC dividends.

Lower base rates are headwinds for most BDCs, but Fidus Investment and Capital Southwest stand out as likely to avoid dividend cuts. FDUS impresses with a low-leverage balance sheet, strong liquidity, robust base dividend coverage, and significant equity stakes that provide income flexibility. CSWC benefits from improved credit quality, strong equity investment gains, high undistributed taxable income, and ample liquidity to support its base dividend.

Steven Bavaria, from Inside the Income Factory, discusses credit assets like high-yield bonds, senior loans, and BDCs for stable, high-yield income, favoring closed-end funds for their resilience and discounts. Expense ratios for BDC ETFs like PBDC appear high due to accounting rules, but actual fund expenses are low—professional management adds only about 0.4%.

I believe the current administration will prioritize broad growth over fighting inflation, creating a rare, bullish environment for certain stocks. Economic indicators show growth is bottoming, inflation remains sticky, and recent policies set the stage for cyclical opportunities to thrive. I see a perfect setup for select companies to deliver strong income and total returns, and I'm closely monitoring this environment for action.

BDC earnings are exposed to interest rate cut risks. There is nothing that the managers can do to avoid it. Instead, they can try to mitigate it through balance sheet strength, equity investments, and well-covered dividends.

BXSL remains a top-tier BDC with strong fundamentals, robust liquidity, and a defensive portfolio supporting its near double-digit yield. Despite analyst optimism, I maintain a hold rating due to macro uncertainty and the likelihood of lower base rates impacting earnings. BXSL's recent performance lags the broader index, reinforcing my view that a better entry point may emerge soon.

Lucid Capital initiated coverage of Blackstone Secured Lending Fund with a Buy rating and $32 price target. The company is among the best positioned in the business development company space from a credit perspective, the analyst tells investors in a research note. The firm says Blackstone Secured's "peer-leading" net interest income margin supports profitability ratios in the top half of peers.

Blackstone Secured Lending stands out for its focus on first lien loans and industry-leading low non-accrual rates, ensuring high portfolio quality. BXSL's dividend was supported by net investment income, with a 1.0X coverage ratio in Q2, and I see the payout as safe. Despite a premium valuation (1.09X NAV), I believe BXSL's strong balance sheet and operational execution justify a higher P/NAV ratio vs. rivals.