Blackstone Secured Lending: This Near 10% Yielding BDC Is Worth Buying On A Pullback

Summary

  • Blackstone Secured Lending has seen its share price appreciate by nearly 23% in the past year, leading to a significant premium to its NAV price.
  • BXSL's latest quarter showed a decline in net investment income, but net income increased, and dividend coverage remained solid.
  • I think that a pullback in BDC share prices may occur once interest rates decline, and suggest investors to wait for a better entry point.
  • Most expect interest rates to decline by September, and if so, BDCs' financials will likely decline as a result of their predominantly floating rate portfolios.
  • If history repeats itself, once interest rates decline, BDCs will also see pullbacks in their share prices.

High Yield, Low Risk Road Sign

JamesBrey

Introduction

I may be one of those who think BDC share prices will fall once interest rates start to decline. Since the start of rate hikes, many have seen their share prices appreciate double-digits, one of those being the externally-managed BDC, Blackstone

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Contributing analyst to the iREIT+Hoya Capital investment group. The Dividend Collectuh is not a registered investment professional nor financial advisor and these articles should not be taken as financial advice. This is for educational purposes only and I encourage everyone to do their own due diligence. I'm a Navy veteran who enjoys dividend investing in quality blue-chip stocks, BDC's, and REITs. I am a buy-and-hold investor who prefers quality over quantity and plans to supplement his retirement income and live off dividends in the next 5-7 years. I aspire to reach and help the hard working, lower and middle class workers build investment portfolios of high quality, dividend-paying companies. I also hope to give investors a new perspective to help them reach financial independence.

Analyst’s Disclosure:I/we have a beneficial long position in the shares of ARCC, BXSL, CSWC either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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