Great Elm Capital Corp

GECC

Market cap $103M

Business development companies (BDCs) are selling off. Recent bankruptcies are sparking fears across private credit. I review the best BDC opportunities following the sell-off.

Great Elm Capital is upgraded to a buy, driven by a deep 33% discount to NAV and an 18.8% dividend yield. GECC's portfolio remains diversified, with 47% in first lien loans and 73% floating rate assets, benefiting from higher interest rates. The recent share price decline is seen as overdone, with non-accruals at ~3% and limited impact from portfolio bankruptcies like First Brands.

Great Elm Capital (GECC) was a big mover last session on higher-than-average trading volume. The latest trend in earnings estimate revisions might not help the stock continue moving higher in the near term.

PALM BEACH GARDENS, Fla., Oct. 07, 2025 (GLOBE NEWSWIRE) -- Great Elm Capital Corp. (“GECC” or the “Company”) (NASDAQ: GECC), a business development company, today provided an update on its investment in First Brands Group, LLC (“First Brands”).

Six new preferred stock and baby bond offerings were tracked, with yields ranging from 6.375% to 8.875%. Top-quality preferreds (Compliance Score 10) are trading at a 2.8% discount to par, offering a current yield of 6.7%. Investors can often buy new preferred IPOs at wholesale prices on the OTC, minimizing capital loss risk if prices drop.

We take a look at the action in preferreds and baby bonds through the second week of September and highlight some of the key themes we are watching. Preferreds outperformed other fixed-income sectors this week, with credit spreads at their tightest since February and yields moving lower. Chimera (CIM) issued an 8.875% 2030 baby bond and is increasing its Agency portfolio and MSR allocation after acquiring HomeXpress.

The Dividend Power strategy highlights 35 high-yield stocks, with 12 'safer' picks offering free cash flow yields above dividend yields and fair valuations. Top five 'safer' Dividend Power stocks for September are Carlyle Secured Lending (CGBD), Stellus Capital (SCM), Blue Owl Capital (OBDC), SLR Investment (SLRC), and Seven Hills Realty (SEVN). Analyst projections suggest the top ten Dividend Power stocks could deliver average net gains of 43.3% by September 2026, though risk and volatility vary.

We take a look at the action in business development companies through the first week of September and highlight some of the key themes we are watching. BDCs saw a slight decline this week, with sector valuations near long-term averages. Bond issuance is rising as BDCs refinance maturing debt, shift from floating-rate credit facilities, and capitalize on attractive borrowing rates.

PALM BEACH GARDENS, Fla., Sept. 04, 2025 (GLOBE NEWSWIRE) -- Great Elm Capital Corp. (the “Company” or “GECC”) (NASDAQ: GECC) announced today the pricing of its underwritten public offering of $50.0 million aggregate principal amount of its 7.75% notes due 2030 (the “Notes”), which will result in net proceeds to the Company of approximately $48.1 million after payment of underwriting discounts and commissions and estimated offering expenses payable by the Company.

PALM BEACH GARDENS, Fla., Sept. 04, 2025 (GLOBE NEWSWIRE) -- Great Elm Capital Corp. (the “Company” or “GECC”) (NASDAQ: GECC) announced today the commencement of an underwritten public offering of unsecured notes due 2030 (the “Notes”). The Notes are expected to be listed on The Nasdaq Global Market under the trading symbol “GECCG,” and to trade thereon within 30 days from the original issue date. The interest rate and other terms of the Notes will be determined by negotiations between the Company and the underwriters.