GBDC Stock Recent News

I love investing in dividend stocks. However, I have to be honest about the headwinds facing them right now. I share three reasons to avoid dividend stocks in H2 2025.

Many investors go for big yield with bigger risk. Barf. This report was recently sent to our members. We picked up shares with a 9.5% yield.

BDCs have been facing an increasingly unfavorable environment recently. However, Jerome Powell just gave a big gift to BDC investors. We discuss what this gift is and how it is impacting our view on the BDC sector.

I use YCharts' Value Score and Ben Graham Formula Value All Stars, or GASV, to identify large-cap stocks offering strong value and dividend safety. Seventeen out of twenty-four "safer" lowest-priced Dividend Dogs of the GASV are currently fair-priced and ready to buy for income investors. Top ten GASV stocks offer projected average net gains of 32.99% by June 2026, with yields ranging from 8.94% to 13.81%.

I maintain my 'Hold' rating on GBDC due to ongoing concerns about dividend sustainability, despite a recent improvement in the payout ratio to 100%. The cessation of special dividends reduced short-term risk, but the base dividend remains at risk if adjusted net investment income doesn't stabilize. GBDC's portfolio quality is average, with a low non-accrual ratio, but negative net funds growth and dilution from the merger weigh on per-share results.

BDCs, REITs, and MLPs offer attractive, sustainable yields due to pass-through structures and stable cash flow profiles. However, each of these sectors has its own unique quirks. I discuss several of these that are often overlooked by investors.

Part 2 of this article compares GBDC's recent dividend per share rates, yield percentages, and several other highly detailed (and useful) dividend sustainability metrics to 11 other BDC peers. This includes a comparative analysis of GBDC's cumulative undistributed taxable income ratio, percentage of floating-rate debt investments, recent weighted average annualized yield, and weighted average interest rate on outstanding borrowings. GBDC's dividend sustainability is fairly strong for now. However, several additional cuts to the Federal Funds Rate will likely result in a GBDC dividend reduction (along with several peers).

Although double-digit yields were normal during the 1980s, lower interest rates and a robust stock market have rendered yields of 10% or higher obscure.

We all learn over time. Some of us more than others. The agency mortgage REIT price-to-book ratios are getting really high, except for the weaker ones. That doesn't make the weak ones a great bargain. Main Street Capital stands out among BDCs for superior management and NAV growth, but that valuation just refuses to come down.

Part 1 of this article compares Golub Capital BDC'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 of each company's investment portfolio as of 12/31/2024 and 3/31/2025. 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).