Blackstone Secured Lending: 10% Yield, 116% Dividend Coverage Make It A Buy

Core Viewpoint - Blackstone Secured Lending (BXSL) is positioned as a strong investment option for income investors, offering a high dividend yield and solid total returns primarily through current income rather than capital gains [2][6]. Company Overview - BXSL is a business development company managed by Blackstone Corp., which oversees over $1 trillion in assets across various sectors [3]. - The company focuses on safer first lien debt, with 98.6% of its portfolio in this category, and maintains a low average loan-to-value (LTV) ratio of 47% [3][4]. Financial Performance - BXSL has demonstrated a non-accrual rate of just 0.3% and an annualized net investment income (NII) return on equity of 13.2% for Q2 2024 [4]. - The company's net asset value (NAV) per share has increased for seven consecutive quarters, reaching $27.19, with a year-over-year growth of 3.3% [4]. - NII per share rose by $0.02 sequentially to $0.89, resulting in a 116% dividend coverage ratio based on the current quarterly dividend of $0.77, which is a 10% increase from the previous year [4]. Portfolio Composition - BXSL's portfolio is well-diversified across 231 companies, with no single investment exceeding 3% of the total portfolio [3]. - The top sectors include software, healthcare, professional services, commercial supplies, and insurance, collectively representing half of the portfolio [3]. Market Environment - BXSL benefits from the current high-interest rate environment, with 99% of its loan investments being floating rate [4][6]. - The company is positioned to deliver strong total returns, with a current dividend yield of 10.3% that is well-supported by cash flow [6]. Valuation - BXSL is currently valued at $29.95, with a price-to-NAV ratio of 1.10x, indicating a 10% premium to book value [5].