Blackstone Secured Lending

BXSL

Market cap $5.98B

BDCs have recently suffered a significant downside volatility. There is indeed a justified reason for system-wide valuation adjustments. Yet, for some BDCs the market has gone too far, while for some the necessary level correction has not yet happened.

The BDC sector has been hammered—but opportunity may finally be knocking. Two high-yield giants now trade at big discounts to NAV. I compare them side by side and share the scenarios in which I think each makes sense to buy.

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Blackstone Secured Lending (BXSL) offers an 11.1% yield and trades at a modest 1% premium, making it attractive after a recent price dip. BXSL's first-lien debt focus, net realized gains, and consistent outperformance set it apart, despite potential for a medium-term dividend cut. BXSL's valuation is compelling, with no cheaper BDC delivering a stronger 3-year total NAV return and efficient NII generation relative to peers.

Discover the five rules I use to find stocks that are positioned to potentially pay me growing dividend income for life. I share some of my top dividend machines that are core to my effort to retire on dividend income. I share how I use these picks to build a complete portfolio.

The BDC sector has been hammered. The discounts have become deep almost across the board. The question is whether to enter now, or is the risk still too high that it will end up being a 'catching a falling knife' moment?

Blackstone Secured Lending Fund is currently one of the most overvalued quality BDC stocks. It is true that BXSL has one of the safest portfolio characteristics in terms of NAV and earnings quality. Yet, the daylight between similar peers (and in some instances even better ones) and BXSL is simply too notable.

Blackstone Secured Lending is a compelling high-yield BDC, now trading near 52-week lows with an 11.8% dividend yield. BXSL has a conservative, high-quality portfolio with 98% first-lien secured loans, low non-accruals, strong diversification, and ample liquidity. Despite tighter payout ratios and lower rates, BXSL's spillover income and stable NAV provide dividend protection and downside risk mitigation.

Stocks offering big dividend yields and trading at what appear to be huge discounts to fair value are often very tempting. However, there is often more to the story. I detail some big dividend stocks that look cheap but have major issues under the hood and are likely about to cut their dividends.

Blackstone Secured Lending and Morgan Stanley Direct Lending are high-quality BDCs facing potential dividend cuts due to falling coverage ratios. BXSL's fundamentals remain strong, but tight dividend coverage, high floating-rate exposure, and significant upcoming debt maturities raise concerns about a near-term cut. MSDL, despite robust liquidity and investment-grade ratings, has seen declining earnings, rising non-performing loans, and high floating-rate exposure, signaling possible dividend reduction.