Golub Capital BDCNASDAQ: GBDC

Weak asset quality, high rates and macroeconomic woes are likely to hurt Zacks SBIC & Commercial Finance industry players like Golub Capital (GBDC) and Crescent Capital (CCAP). Yet, decent financing demand across sectors is likely to aid.

Here is how Golub Capital BDC (GBDC) and Green Brick Partners (GRBK) have performed compared to their sector so far this year.

Golub Capital BDC is selling at a reasonable 8% premium to net asset value, considering its strong dividend coverage and growth in net investment income. The company announced a merger with another BDC, which will improve its scale and fee structure. Golub Capital BDC has robust dividend coverage and has consistently paid special dividends, making it an attractive option for passive income investors.

Golub Capital BDC had a strong quarter with a 3.8% total NAV return and a small increase in net income. The company has a diverse loan portfolio of over 300 positions, focusing on floating-rate first-lien loans in industries like software and healthcare. GBDC has consistently outperformed other BDCs in coverage in 5 out of the last 6 quarters.

Golub Capital BDC (GBDC) reported quarterly earnings of $0.51 per share, which fell short of the Zacks Consensus Estimate of $0.52 per share. This is an increase from earnings of $0.42 per share in the same period last year.

In the fourth week of April, we examine the performance of the BDC sector. BDCs saw a positive week and month, with a return of approximately 2% in April. Golub Capital announced a steady dividend and an increase in net earnings.

Golub Capital BDC had 55% growth in Investment Income and 49% growth in Net Investment Income in its fiscal year ending 9/30/23, and record Adjusted NII in the latest quarter ended 12/31/23. 76% of Golub Capital's originations are to borrowers with under $100M in annual EBITDA. Golub Capital's advisor income incentive fee and capital gain incentive fee fell from 20% to 15%, which will bolster 2024 earnings.

NEW YORK--(BUSINESS WIRE)--Golub Capital BDC, Inc., a business development company (NASDAQ: GBDC, www.golubcapitalbdc.com), announced today that it will report its financial results for the quarter ended March 31, 2024 on Monday, May 6, 2024 after the close of the financial markets. Golub Capital BDC, Inc. will host an earnings conference call at 11:00 a.m. (Eastern Time) on Tuesday, May 7, 2024 to discuss its quarterly financial results. All interested parties may participate in the conference.

Golub Capital BDC reported a good quarterly result with a rise in the NAV and flat net income. The company's loan portfolio is well-diversified, with over 300 positions, and targets primarily floating-rate first-lien loans in sectors such as software and healthcare. GBDC has a shareholder-friendly fee structure and has seen a sustainable increase in net income, leading to a higher valuation and potential for further outperformance.