Core Viewpoint - Goldman Sachs BDC, Inc. reported its financial results for the third quarter ended September 30, 2025, highlighting a net investment income of $0.40 per share, which translates to an annualized net investment income yield of 12.5% on book value [1]. Financial Performance - The net investment income for the quarter was $0.40 per share [1]. - The annualized net investment income yield on book value was reported at 12.5% [1].

Turmoil has reached business development companies this year. Falling rates combined with some significant corporate bankruptcies have separated the wheat from the chaff as the golden children of the rising rate era begin to show cracks. TheAnalyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compe ...

Core Insights - Small-cap stocks present lucrative investment opportunities due to frequent mispricings resulting from limited analyst coverage [1] - The article identifies three small-cap stocks to avoid and suggests alternatives for investment [2] Company Summaries Valley National Bank (VLY) - Market Cap: $6.13 billion, providing commercial, consumer, and wealth management banking services [3] - Currently trading at $10.78 per share, which is 0.8x forward price-to-book (P/B) ratio [5] BankUnited (BKU) - Market Cap: $3.04 billion, offering commercial lending, deposit services, and treasury solutions primarily in Florida and New York [6] - Trading at $39.96 per share, equivalent to 1x forward P/B ratio [8] Prospect Capital (PSEC) - Market Cap: $1.18 billion, one of the largest publicly traded business development companies in the U.S., providing debt and equity financing to middle-market companies [9] Concerns Regarding Valley National Bank (VLY) - The article suggests there are better investment opportunities than VLY [5] Concerns Regarding BankUnited (BKU) - The article indicates caution is warranted regarding BKU, although specific reasons are not detailed [8] Concerns Regarding Prospect Capital (PSEC) - Sales stagnation over the last two years indicates a need for new growth strategies [11] - Net interest margin of 2.9% is low, necessitating increased loan originations to maintain profitability [11] - Earnings per share have decreased by 17% annually over the last two years, with flat revenue indicating reduced profitability per sale [11] Additional Financial Metrics for Prospect Capital (PSEC) - Net interest income growth of 5.5% over five years is below typical banking firms [12] - A net interest margin of 2.8% is significantly lower than other banks, suggesting unprofitable loans [12] - An expected worsening of the efficiency ratio by 17.5 percentage points in the coming year [12] Sales Performance of Prospect Capital (PSEC) - Annual sales have declined by 8.1% over the past two years, indicating market disconnect [13] - Earnings per share fell by 66.3% annually despite revenue growth, highlighting profitability issues [13] - Tangible book value per share has decreased by 4.3% annually over the last five years due to loan losses and capital returns [13]

Core Viewpoint - Morgan Stanley Direct Lending Fund (NYSE:MSDL) is a business development company that provides financing solutions to middle-market companies, playing a crucial role in capital provision where traditional bank financing may not be accessible [1] Price Target Trends - The consensus price target for MSDL has shown a slight upward trend over the past year, with the average price target increasing to $18.33 last month, indicating positive sentiment among analysts [2] - The average price target was $17.83 in the last quarter, reflecting a $0.50 increase compared to the previous month, showcasing growing confidence in MSDL's performance [3][4] - Wells Fargo has set a price target of $17, reflecting current market concerns, which contrasts with the overall positive sentiment [2] Financial Performance and Challenges - Despite the positive price target trends, MSDL faces challenges such as a decline in earnings and an increase in non-performing loans, which could impact future price targets [3][4] - The company is exposed to high floating-rate risks, which may signal a potential dividend cut [4] Earnings Reports and Market Conditions - Investors are advised to monitor MSDL's quarterly earnings reports, as these can significantly influence analysts' price targets, with positive surprises potentially leading to upward revisions [5][6] - The current economic climate, characterized by persistent inflation and a weakening labor market, adds uncertainty to MSDL's outlook [5][6]

Core Insights - BlackRock TCP Capital Corp. reported its financial results for Q3 2025, highlighting a net investment income of $27.3 million, which translates to $0.32 per diluted share, surpassing previous expectations [1] Financial Highlights - The net investment income for the quarter ended September 30, 2025, was $27.3 million [1] - The earnings per diluted share were reported at $0.32 [1]

Core Viewpoint - Dividend investors should consider Realty Income, Federal Realty, and Ares Capital for their attractive yields and consistent performance in their respective sectors [2][3]. Group 1: Company Overview - Realty Income is the largest net lease REIT with over 16,500 properties, focusing on retail and unique asset types like vineyards and casinos [7][9]. - Federal Realty is a leader in the strip mall sector and is the only REIT to achieve Dividend King status, with over 50 years of dividend increases [5][6]. - Ares Capital operates in the business development sector, providing high-interest loans to smaller companies, which inherently carries more risk [10][14]. Group 2: Dividend Yields - Ares Capital offers the highest yield at 9.4%, followed by Realty Income at 5.6%, and Federal Realty at 4.7% [4]. - Federal Realty emphasizes quality over quantity in its property holdings, which supports its consistent dividend growth [6]. Group 3: Business Models and Risks - Realty Income's business model allows for reliable dividends due to its scale and diversified property portfolio [8][9]. - Federal Realty's focus on redevelopment and strategic asset sales enhances its value and dividend reliability [6]. - Ares Capital's dividend is less reliable due to its exposure to economic downturns, which can affect the ability of its borrowers to repay loans [12][14]. Group 4: Investment Considerations - Federal Realty and Realty Income are considered stable, "boring" investments suitable for those seeking consistent dividends [15]. - Ares Capital, while offering a high yield, may not be suitable for conservative investors due to potential dividend volatility [15].

Core Insights - TriplePoint Venture Growth BDC Corp. reported its financial results for Q3 2025, highlighting its role as a financing provider for venture growth stage companies in technology and high growth industries [1] Financial Performance - The financial results for the third quarter ended September 30, 2025, were announced, indicating the company's ongoing operations and performance metrics [1] - The company had previously declared its fourth quarter 2025 regular dividend on October 14, 2025, reflecting its commitment to returning value to shareholders [1]

Core Insights - Palmer Square Capital BDC reported a net investment income of $13.6 million or $0.43 per share for Q3 2025, exceeding the base dividend of $0.36 per share and total dividend of $0.42 per share, which includes a supplemental distribution of $0.06 [5][26] - The company deployed $138.7 million in capital during the third quarter and generated total investment income of $31.7 million, down 15.1% from the previous year [26][18] - The NAV per share as of September 30, 2025, was $15.39, a decrease from $15.68 at the end of 2025 [27] Financial Performance - Total investment income for Q3 2025 was $31.7 million, down from $37.3 million in the same period last year [26] - Total net expenses decreased to $18 million from $21.6 million year-over-year [26] - The company experienced total net realized and unrealized losses of $10.3 million, compared to $8.2 million in the prior year [26] Investment Strategy - The company focuses on a distribution strategy that maximizes cash returns to investors, paying out nearly all excess earnings as supplemental dividends [5] - The investment portfolio had a fair value of approximately $1.26 billion across 42 industries, with a weighted average total yield to maturity of 10.07% [18][19] - The portfolio is 95% senior secured, with an average hold size of approximately $5 million, contributing to a strong credit profile [20] Market Outlook - The company noted early signs of improvement in deal activity, with a healthier mix of opportunities in both syndicated and private credit markets [11][12] - The recent $55 billion take-private of Electronic Arts and the $18 billion take-private of Hologic indicate a strong market appetite for high-quality transactions [12] - The company remains cautiously optimistic about the environment, anticipating continued refinancing activity and potential M&A growth [15][16] Shareholder Alignment - The Board approved an additional $5 million for open market share repurchases, complementing the existing stock repurchase plan [25] - The management fee structure is based on net asset value rather than gross assets, aligning the interests of the management team with those of shareholders [24] - The company emphasizes transparency by disclosing NAV on a monthly basis, providing shareholders with regular insights into performance [6]

Core Insights - Ares Capital (ARCC) reported a strong total NAV return of 3% for Q3, indicating robust performance without any visible credit issues in its portfolio [1] Company Performance - The company achieved a total NAV return of 3% over the third quarter [1] - There were no "cockroaches" or portfolio credit problems reported, suggesting a healthy investment environment [1]

Core Insights - Ares Capital (ARCC) reported a strong total NAV return of 3% for Q3, indicating robust performance without any visible credit issues in its portfolio [1] Company Performance - The company achieved a total NAV return of 3% over the third quarter [1] - There were no "cockroaches" or portfolio credit problems reported, suggesting a healthy investment environment [1]