Barings BDC

BBDC

Market cap $970M

BDC sector valuations remain depressed, with P/NAV metrics under 1x due to falling rates and credit risk concerns. Dividend sustainability is diverging across BDCs; not all will cut, but the ones with sustainable dividends do not automatically have strong total return prospects. I highlight one BDC as a compelling bargain with strong total return prospects and contrast it with another viewed as highly overpriced.

Barings BDC offers an 11.5% dividend yield and trades at a 0.81x price-to-NAV, well below peers and historical averages. BBDC's portfolio is primarily first-lien secured, with low non-accruals and strong credit quality, supported by the company's origination platform. It has a 123% dividend coverage ratio and $0.65/share in spillover income, providing additional cushion.

Barings BDC offers a first-lien focused portfolio with strong origination and asset quality. BDC trades at a 19% discount to NAV despite covering its 11.6% yield with net investment income. The BDC's portfolio grew 5% year-over-year, with non-accruals well below 1%, highlighting balance sheet strength.

Barings BDC Inc has entered a deep discount territory. At the same time, BBDC's 11.7% dividend is supported by one of the strongest base dividend coverage levels in the BDC game. In Q3, 2025, we also noticed a manifestation of BBDC's hidden strength - competitive fee structure.

The December Dividend Power list identifies 35 high-yield stocks, with 14 offering 'safer' dividends backed by free cash flow yields exceeding dividend yields. Top actionable picks include Annaly Capital, Barings BDC, Noah Holdings, Blue Owl Capital, and SLR Investment, all meeting the dogcatcher ideal for safety and value. Analyst projections estimate average net gains of 38.75% for the top ten Dividend Power stocks by December 2026, with risk profiles generally below market average.

Barings BDC common stock is trading at a deep 20% discount, offering a projected NII yield near 10%. BBDC's average 3- and 5-year total returns are around 9%, with a credit rating of BBB-/Baa3 and relatively low bond yield spreads. Despite historical losses and modest ROE, discounted shares present higher return potential than the company's own baby bonds, which yield about 8%.

Barings BDC remains a resilient choice in the BDC sector, offering a high 11.6% dividend yield and strong distribution coverage. BBDC's portfolio is well-diversified, focused on senior secured first lien debt, and maintains low non-accruals compared to peers, supporting income stability. Despite healthy fundamentals, BBDC faces persistent NAV declines and limited new investment activity, constraining upside potential in a high-rate environment.

According to the Internal Revenue Service (IRS), passive income generally includes earnings from rental activity or any trade, business, or investment in which the individual does not materially participate.

Of 35 November Dividend Power Dogs, 12 are recommended for "safer" dividends, with free-cash-flow-yields exceeding dividend-yields, and returns from $1,000 invested equaling-or-exceeding share-price, making them ideal buys. Analyst forecasts project average net gains of 36.78% for the top ten DiviPower stocks by November 2026, with strong upside potential in select financials. Caution is advised for stocks with negative free cash flow margins, as 18 of 35 are considered cash-poor and riskier for dividend sustainability.

Barings BDC Inc ( BBDC ) Q3 2025 Earnings Call November 7, 2025 9:00 AM EST Company Participants Joseph Mazzoli - Head of Investor Relations & Client Development Eric Lloyd - Executive Chairman of the Board & CEO Matthew Freund - President Elizabeth Murray - CFO, COO & Principal Accounting Officer Conference Call Participants Heli Sheth - Raymond James & Associates, Inc., Research Division Presentation Operator Greetings. At this time, I'd like to welcome everyone to the Barings BDC, Inc. conference call for the quarter ended September 30, 2025.