Goldman Sachs BDC

GSBD

Market cap $1.06B

Goldman Sachs BDC trades at a 27% discount to NAV, offering a 15.5% yield amid market skepticism over underwriting and NAV stability. The dividend looks safe - until you look under the hood. One trend could decide whether this stock rebounds or keeps sinking.

The Dividend Power strategy highlights 35 high-yield, low-valuation stocks, with 6 identified as 'safer' due to strong free cash flow coverage. The top ten DiviPower stocks are projected to deliver an average net gain of 40.62% by January 2027, with risk/volatility 14% below the market. Seventeen of thirty-five Dividend Power Dogs show negative free cash flow margins, signaling unsustainable dividends and elevated risk.

Goldman Sachs BDC faces portfolio value declines and dividend coverage concerns amid anticipated lower federal fund rates. GSBD's non-accrual percentage has improved in the last year, but the BDC's portfolio quality and coverage ratio lag peers like ARCC and BXSL. Shares trade at an excessive discount to net asset value, reflecting ongoing net investment income pressure and portfolio contraction risks.

BDCs face earnings pressure from lower base rates, but fears of severe dividend cuts are overstated. Quite many BDCs have several levers to pull in order to absorb ~100 bps of base rate cuts without touching their dividends. Yet, I would say that the non-accrual risk is understated.

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.

Goldman Sachs BDC saw net asset value per share dip by 2.1% sequentially as total investment income fell from its year-ago comp. The BDC did not declare a $0.16 per share special dividend for its final quarter, but is currently paying out an aggregate 14.5% dividend yield. GSBD has seen its net asset value on a sustained dip since 2023, with negative net fundings pushing its total investment portfolio lower.

Goldmans Sachs has agreed to buy Innovator Capital Management, a provider of defined-outcome ETFs, for about $2 billion. Innovator had $28 billion of assets under supervision across 159 ETFs as of Sept.

Goldman Sachs BDC offers a high-yield and large discount, but deteriorating financials make the stock risky despite recent investment activity. GSBD's net investment income and NAV continue to decline year-over-year, underperforming peers like ARCC and HTGC, signaling caution for value hunters. While the base dividend appears safe for now, ongoing rate cuts and economic headwinds could pressure future payouts and overall performance.

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.

Goldman Sachs supported its general counsel, Kathy Ruemmler, after her emails with sex offender Jeffrey Epstein from years ago were released by a congressional committee. In the emails, Epstein and Ruemmler discuss President Donald Trump, former President Bill Clinton, and Facebook founder Mark Zuckerberg.