Barings BDC (BBDC) AI Stock Analysis

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Barings BDC

(NYSE:BBDC)

70Outperform

Barings BDC's strong financial performance and attractive valuation are key strengths, supported by positive earnings call highlights. However, technical indicators suggest caution due to bearish trends. Nonetheless, the high dividend yield and robust earnings performance offer significant appeal to investors.

Barings BDC (BBDC) vs. S&P 500 (SPY)

Market Cap

$909.68M

Dividend Yield12.15%

Average Volume (3M)530.02K

Price to Earnings (P/E)8.2

Beta (1Y)0.54

Revenue Growth3.82%

EPS Growth-12.74%

CountryUS

Employees2

SectorFinancial

Sector Strength87

IndustryFinancial - Credit Services

Share Statistics

EPS (TTM)0.25

Shares Outstanding105,408,936

10 Day Avg. Volume328,059

30 Day Avg. Volume530,019

Financial Highlights & Ratios

PEG Ratio-2.38

Price to Book (P/B)<0.01

Price to Sales (P/S)0.00

P/FCF Ratio18.14

Enterprise Value/Market Cap0.91

Enterprise Value/Revenue0.02

Enterprise Value/Gross Profit3.20

Enterprise Value/Ebitda0.98

Forecast

1Y Price Target

$9.25

Price Target Upside8.06% Upside

Rating ConsensusHold

Number of Analyst Covering2

Barings BDC Business Overview & Revenue Model

Company DescriptionBarings BDC, Inc. (NYSE: BBDC) is a publicly traded, externally managed investment company that has elected to be treated as a business development company under the Investment Company Act of 1940. It seeks to invest primarily in senior secured loans, first lien debt, unitranche, second lien debt, subordinated debt, equity co-investments and senior secured private debt investments in private middle-market companies that operate across a wide range of industries. It specializes in mezzanine, leveraged buyouts, management buyouts, ESOPs, change of control transactions, acquisition financings, growth financing, and recapitalizations in lower middle market, mature, and later stage companies. It invests in manufacturing and distribution; business services and technology; transportation and logistics; consumer product and services. It invests in United States. It invests in companies with EBITDA of $10 million to $75 million, typically in private equity sponsor backed. Barings BDC, Inc. Barings BDC, Inc. was incorporated on October 10, 2006 and is based in Charlotte, North Carolina with an additional office in Raleigh, North Carolina.

How the Company Makes MoneyBarings BDC generates revenue primarily through interest income from its portfolio of debt investments. The company invests in middle-market businesses, providing them with necessary capital while earning interest on the loans extended. Additionally, BBDC may earn income from equity investments through dividends or capital gains. The company's earnings are also influenced by its ability to efficiently manage its portfolio and potentially benefit from market conditions that affect loan demand and interest rates. Barings BDC relies on its external manager, Barings LLC, for investment advisory services, leveraging the manager's expertise and resources to make informed investment decisions.

Barings BDC Financial Statement Overview

Summary

Barings BDC shows strong revenue growth and profitability. The balance sheet reflects stability with a solid equity base, though historical leverage raises caution. Improved cash flow metrics highlight better management, but past volatility needs attention.

Income Statement

Positive

Barings BDC shows a strong revenue base with substantial growth in total revenue over the years. The net profit margin has improved significantly, indicating strong profitability. However, fluctuations in EBIT suggest some volatility in operational efficiency.

Balance Sheet

Positive

The company maintains a solid equity base, with a favorable equity ratio suggesting stability. Despite a reduction in total debt, high leverage in previous years suggests potential risk. The return on equity remains healthy, supporting shareholder value creation.

Cash Flow

Positive

The operating cash flow has improved over the years, but historical negative cash flows indicate past cash management challenges. The free cash flow to net income ratio is favorable, suggesting effective cash conversion, but historical volatility poses a concern.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
123.59M	289.20M	219.13M	135.34M	71.03M
	Gross Profit
123.59M	289.20M	219.13M	135.34M	71.03M
	EBIT
113.75M	214.52M	173.13M	91.98M	50.87M
	EBITDA
190.50M	214.52M	173.13M	91.98M	50.87M
	Net Income Common Stockholders
110.29M	128.00M	4.68M	77.69M	8.18M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
-10.42M	57.19M	139.41M	84.25M	89.00M
	Total Assets
2.70B	2.68B	2.71B	2.16B	1.68B
	Total Debt
0.00	1.44B	1.45B	1.37B	944.00M
	Net Debt
-77.85M	1.37B	1.31B	1.29B	855.00M
	Total Liabilities
1.51B	1.48B	1.52B	1.42B	959.23M
	Stockholders Equity
1.19B	1.20B	1.19B	741.93M	717.80M
Cash Flow		Free Cash Flow
122.16M	76.94M	86.27M	-396.55M	-218.13M
	Operating Cash Flow
122.16M	76.94M	86.27M	-396.55M	-218.13M
	Investing Cash Flow
0.00	0.00	-120.88M	-451.63B	-262.35B
	Financing Cash Flow
-101.35M	-145.83M	-31.11M	388.32M	288.63M

Barings BDC Technical Analysis

Technical Analysis Sentiment

Negative

Last Price8.56

Price Trends

50DMA

9.09

Negative

100DMA

9.32

Negative

200DMA

9.30

Negative

Market Momentum

MACD

-0.11

Negative

RSI

42.48

Neutral

STOCH

35.60

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BBDC, the sentiment is Negative. The current price of 8.56 is below the 20-day moving average (MA) of 8.65, below the 50-day MA of 9.09, and below the 200-day MA of 9.30, indicating a bearish trend. The MACD of -0.11 indicates Negative momentum. The RSI at 42.48 is Neutral, neither overbought nor oversold. The STOCH value of 35.60 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for BBDC.

Barings BDC Risk Analysis

Barings BDC disclosed 83 risk factors in its most recent earnings report. Barings BDC reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Barings BDC Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ATLC	80 Outperform	$822.76M	11.41	22.68%	―	13.46%	10.43%
BBDC	70 Outperform	$909.68M	8.25	8.24%	12.15%	3.82%	-12.74%
Sector *	64 Neutral	$12.60B	9.73	7.92%	16985.68%	12.21%	-5.61%
RWAY	63 Neutral	$341.73M	4.78	13.86%	18.42%	-2.83%	75.00%
LC	62 Neutral	$1.21B	23.80	3.86%	―	5.72%	31.82%
OCSL	59 Neutral	$1.18B	104.35	0.60%	14.87%	-37.81%	-90.29%
PRAA	55 Neutral	$533.01M	7.51	6.03%	―	23.90%	―

* Financial Sector Average

Performance Comparison

BBDC

Barings BDC

8.56

-0.23

-2.62%

OCSL

Oaktree Specialty Lending

13.79

-3.20

-18.83%

PRAA

Pra Group

13.44

-13.33

-49.79%

LendingClub

10.58

1.41

15.38%

ATLC

Atlanticus Holdings

54.87

26.71

94.85%

RWAY

Runway Growth Finance Corp

9.12

-1.26

-12.14%

Barings BDC Earnings Call Summary

Earnings Call Date:May 08, 2025

(Q1-2025)

% Change Since: -1.61%|

Next Earnings Date:Aug 06, 2025

Earnings Call Sentiment Neutral

The earnings call presented a balanced view with strong financial and portfolio performance, including significant origination activity and a strategic move to terminate the Credit Support Agreement. However, challenges such as a slight decline in yield, macroeconomic uncertainties affecting decision-making, and expected reduction in transaction activity were also highlighted.

Q1-2025 Updates

Positive Updates

Strong Origination Activity

Net originations of more than $100 million during the first quarter, supported by a benign credit environment and a focus on top of the capital structure investments.

Termination of Credit Support Agreement

Board accepted a proposal to terminate the Credit Support Agreement related to the MVC capital transaction for $23 million, allowing capital to be rotated into income-producing investments.

Solid Financial Performance

Net asset value per share was $11.29, unchanged from the prior quarter, and net investment income per share was $0.25.

Strong Portfolio Performance

Non-accrual rate of 60 basis points at fair value, well below industry averages, indicating strong credit performance.

Dividend Consistency

Second quarter dividend of $0.26 per share declared, along with a $0.15 supplemental dividend, equating to an 11% yield based on March's net asset value.

Negative Updates

Yield Decline

Weighted average yield at fair value declined to 10.1% from 10.4% due to reductions in reference rates and re-pricing activities.

Macroeconomic Uncertainty

Management teams are experiencing a freeze on decision-making due to tariffs and trade uncertainties, affecting hiring and capital investments.

Reduction in Transaction Activity

Anticipated reduction in transaction activity during the second quarter compared to strong deployment experience in early 2025.

Company Guidance

During the call, Barings BDC Inc. provided detailed guidance on its financial performance and strategic initiatives for the first quarter of fiscal year 2025. The company reported net originations exceeding $100 million and a net asset value per share of $11.29, consistent with the previous quarter. Net investment income was $0.25 per share, and the board declared a second quarter dividend of $0.26 per share, along with a special dividend of $0.05, resulting in an 11% distribution yield based on March's net asset value. The portfolio's weighted average yield at fair value was 10.1%, down slightly from the previous quarter, while non-accruals stood at 0.6% at fair value. The company also highlighted the termination of the Credit Support Agreement related to the MVC Capital transaction, with a $23 million payment to be used for income-producing investments, enhancing core earnings power. The company emphasized its focus on middle market credit and defensive sectors, with 74% of its portfolio in secured investments, 71% of which are first lien securities, and maintaining a strong interest coverage ratio of 2.4 times. Additionally, Barings BDC Inc. discussed its strategic investments, including Eclipse Business Capital and Recade Holdings, and its commitment to optimizing the portfolio by rotating assets into Barings-originated investments.

Barings BDC Corporate Events

DividendsFinancial Disclosures

Barings BDC Reports Record Income and Dividend Announcement

Positive

Feb 20, 2025

On February 20, 2025, Barings BDC, Inc. released their financial results for the fourth quarter and full year of 2024, reporting a record net investment income and a decrease in net asset value per share from $11.32 to $11.29 due to realized losses. The company declared a quarterly cash dividend of $0.26 per share and special dividends totaling $0.15 per share, citing a strong performance in 2024 with reduced non-accrual rates and significant investments across various industries, highlighting their strategic focus and positive momentum heading into 2025.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.