The Best BDC To Buy For Fed Rate Cuts

[@katrinaewarak]

I have Main, ARCC, OBDC and Hercules. Biggest position is MAIN.

[@garythomas3150]

Great video. I tend to buy, hold, and drip. I like to do this with OBDC, MAIN, HTGC, ARCC, CSWC, and BXSL, in that order. 👍

[@SamuelDividends]

Glad you enjoyed it!

[@jotteser6393]

I‘m invested in ARCC and MAIN. For exposure to realestate I own ADC.

[@SamuelDividends]

Thank you for sharing!

[@Tchp-ld1uz]

For bdc exposure in my dividend portfolio, I have it structured as 75% in MAIN and 25% in BBDC…barings has good dividend coverage and better yield when you may not collect special dividends from MAIN

[@Luke-dw9br]

What about Pennant park investment?

[@tritosac]

I have been looking at FSK for a while. My problem with it is they did a reverse stock split in 2020. I have been burned by companies that do reverse splits of their stocks. I like OBDC as it still trades a discount to NAV despite their exposure to the rate cuts.

[@SamuelDividends]

FSK has done a lot better since KKR took over management of the firm in late 2018, its reverse stock split notwithstanding.

[@trainingwithmateo]

I agree. I like MAIN, but not enough to pay a premium. I’m going to look into FSK. Great content!

[@SamuelDividends]

Thank you!

[@vdoan6583]

Thank you for the update Agree w you it is not a good time to buy BDC except Fsk For those who need income for retirement just hold on to it

[@CP-qg4ks]

I own MAIN ARCC & HTGC I’m not buying more right now and I’m definitely not selling! I’ll buy more if the premium drops. I believe they deserve a premium because they are quality companies but I want to see what happens after a few earnings calls

[@HelloMartians]

What happened with OCSL? I've been watching it since you recommended it.

[@SamuelDividends]

I posted an update video on it a month ago: kzbin.info/www/bejne/eZaci6mpZbaUjc0

[@wellintonsaraiva4583]

If you Can live with the risk, i bought a lots of TCPC. Good entry point in my opinion.

[@SamuelDividends]

Thanks for sharing your pick

[@mateomatt123]

Own MAIN, ARCC, OBDC. I’m guessing OBDC is trading at discount to NAV because of upcoming merger of OBDC/OBDE. Hoping for rebound after merger. Thank you for FSK idea and analysis!

[@Bingbaraboom]

Yes, that's my point. You recommended it but you didn't mention it today (maybe because it is not included in the ETF you used to come up with today's analysis)

[@SamuelDividends]

Are you talking about OCSL? It is not ranked in the top 10 in size. It is one of the least sensitive to rate cuts, though.

[@HelloMartians]

@@SamuelDividends - yes, OCSL. The dividend looks to good to be true, that's why I'm asking. I'm thinking to sell 1/2 of my ARCC and buy OCSL after the election.

[@nunofontes3895]

Any thoughts on GSBD? Great content btw.

[@SamuelDividends]

Thank you! They are probably decent, but not particularly cheap right now and I have discovered that some loans that other BDCs would classify as nonaccruals they count as performing, so I do not trust their nonaccrual numbers.

[@nunofontes3895]

@@SamuelDividends thanks for the answer Samuel. Regards.

[@FxAndrej]

Is there really no reason why FSK is trading at a discount unlike most other quality BDCs? Really none?

[@1lllllllll1]

Of course there is. The non-accrual ratio is pretty high at 4% in Q4/24, which makes its dividend margin quite tight. If your hypothesis is a genuine market downturn for 24, you’re unlikely to be happy. If your hypothesis is an even-keel market without much trouble ahead for 24, you’ll be pretty happy. Anything is risky. There are real reasons why Buffet has over 230bn in cash burning a hole in his pocket. He’s said it often, there is no value to be had because everything is priced to perfection. I wish Samuel would have pointed out the non accrual ratio.

[@FxAndrej]

@@1lllllllll1 I take non-accruals seriously. Thank you for pointing this out.

[@SamuelDividends]

@@1lllllllll1 I did mention the nonaccrual ratio in the video. Moreover, as I also discussed in the video, the headline nonaccrual rate is misleading. Nonaccruals are virtually entirely concentrated in the legacy pre-KKR portfolio as the nonaccrual rate is a mere 0.6% in the KKR underwritten investments which make up over 90% of the overall investment portfolio. Given the current discount to NAV, you are basically getting the troubled legacy portfolio completely for free.

[@SamuelDividends]

@@FxAndrej I did mention the nonaccrual ratio in the video. Moreover, as I also discussed in the video, the headline nonaccrual rate is misleading. Nonaccruals are virtually entirely concentrated in the legacy pre-KKR portfolio as the nonaccrual rate is a mere 0.6% in the KKR underwritten investments which make up over 90% of the overall investment portfolio. Given the current discount to NAV, you are basically getting the troubled legacy portfolio completely for free.

[@FxAndrej]

@@SamuelDividends Thank you for highlighting this.

[@nabasdak]

do u eat in that kitchen:)

[@SamuelDividends]

Haha yes. Why?

[@nabasdak]

@@SamuelDividends it's always shining clean!

[@SamuelDividends]

@@nabasdak Haha thanks