Current Analysis: Golub Capital BDC Inc.

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Golub Capital BDC Inc (GBDC) is an externally managed, closed-end, non-diversified management investment company.

Its investment objective is to generate current income and capital appreciation by investing in senior secured and one-stop loans in United States middle-market companies. It also invests in the second lien and subordinated loans, warrants, and minority equity securities in United States middle-market companies.

The company generally invests in securities that have been rated below investment grade by independent rating agencies or that would be rated below investment grade if they were rated.

The company has paid quarterly dividends since June 2010 and is headquartered in New York, NY.

Three key data points gauge Golub Capital BDC Inc. or any dividend-paying firm.

The key three are:

(1) Price

(2) Dividends

(3) Returns

Those three basic keys best tell whether any company has made, is making, and will make money.
 

GBDC Price

Over the past year, Golub Capital Corp's share price rose about 14.25% from $13.89 to $15.87 as of Monday’s market close.

If GBDC trades in the range of $12 to $17 this next year, its recent $15.87 share price might rise to $16.40 by next year. Of course, GBDCs price could drop about the same $0.53 estimated amount or more.

My annual upside estimate of $0.53 however, is in line with the median of one-year target estimates from five analysts tracking Golub for brokers.
 

GBDC Dividend

Golub Capital Corp has paid variable quarterly dividends since June 2010. GBDC’s most recent Q dividend of $0.39 was declared January 17th to shareholders of record on February 29th. The payout is to be made on March 29th.  So there’s time to get this pending payment.

A forward-looking $0.90 annual dividend yields 5.67% at Friday’s $15.87 share price.
 

GBDC Returns

To put it all together, add GBDC’s estimated annual dividend of $0.90 to the estimated price upside of $0.53 to find a $1.43 gross gain.

At Monday’s $15.87 share price, a little under $1000 would buy 63 shares.

A $10 broker fee (if charged), paid half at purchase and half at sale, would cost us about  $0.16 per share.

Subtracting that likely $0.16 brokerage cost from the $1.43 gross gain produces a net gain of $1.27 X 63 shares = $80.01 for an 8.00% estimated net gain.

You might choose to pounce on Golub Capital Corp It is a 14 year old dividend paying New York based business development company.  Furthermore, the estimated $56.70 annual dividend income from $1k invested is over 3.5 times greater than GBDC’s recent $15.87 single share price.

The exact track of Golub Capital BDC Inc's ongoing future price and dividend will be determined by market action.

Remember the true value of any stock is best realized through personal ownership of shares.


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Disclaimer: This article is for informational and educational purposes only and should not be construed to constitute investment advice. Nothing contained herein shall constitute a solicitation, ...

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