Barings BDC, Inc. (BBDC) | Investment Case

1. Company Snapshot

1.a. Company Description

Barings 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.

Show Full description

1.b. Last Insights on BBDC

Barings BDC's recent performance was driven by its strong Q4 2024 earnings, with a 3.2% total NAV return, according to the BDC Weekly Review. The company's net investment income fell 9% year-over-year, but dividend coverage remained strong at 110%. Additionally, the recent conference call and earnings release highlighted the company's improving performance, which could close the valuation gap. The company's stable NAV over the last few years and strong dividend yield of 10.6% also contributed to its positive performance.

1.c. Company Highlights

Last Price	8.78
Change Percentage	0.57%
Open	8.68
Previous Close	8.73
Market Cap ( Millions)	923
Volume	1063496
Year High	10.85
Year Low	7.66
M A 50	8.83
M A 200	9.18

FCF Yield	-19.37%
Dividend Yield	13.55%
ROE	6.60%
Debt / Equity	0.00%
Net Debt / EBIDTA	0.00%
Price To Book	0.79
Price Earnings Ratio	11.84
Price To FCF	-5.16
Price To sales	6.12
EV / EBITDA	11.39

2. BBDC Beats Earnings Expectations with Strong NII

Barings BDC, Inc. (BBDC) reported its third-quarter 2025 results, with net investment income (NII) of $0.32 per share, surpassing estimates of $0.27 per share. The company's weighted average yield at fair value was 9.9%, and the Board declared a fourth-quarter dividend of $0.26 per share, consistent with the prior quarter, equating to a 9.4% yield on NAV. The net asset value (NAV) per share was $11.10, representing a 0.7% decrease quarter-over-quarter.

Publication Date: Nov -23

                                    📋 Highlights
                                    Net Investment Income Growth:
                                                NII increased to $0.32 per share, up from $0.28 in Q2 and $0.29 in Q3 2024.
Dividend Yield Consistency:
                                                Declared $0.26 per share dividend (9.4% yield on $11.10 NAV), matching the prior quarter.
Portfolio Security:
                                                95% Barings-originated positions, 74% secured investments, and 71% first lien securities with 2.4x interest coverage.
Capital Structure Strength:
                                                Net leverage of 1.26x and $300 million in new unsecured debt issuance, enhancing funding flexibility.
Non-Accruals Stability:
                                                Non-accruals (excluding Sierra CSA) at 0.4% of assets, reflecting robust credit quality.

                                

Portfolio Quality and Composition

The portfolio is 95% comprised of Barings-originated positions, with 74% of investments being secured and 71% being first lien securities. The weighted average interest coverage remained strong at 2.4x, and risk ratings exhibited stability during the quarter. Non-accruals, excluding assets covered by the Sierra credit support agreement (CSA), accounted for 0.4% of assets on a fair value basis, indicating a relatively low level of credit risk.

Capital Structure and Funding

BBDC's net leverage ratio was 1.26x at quarter-end, and the company issued $300 million of senior unsecured notes during the quarter. The company has a strong funding profile, with an industry-leading share of unsecured debt, and a well-diversified capital structure. The leadership transition was also announced, with Tom McDonnell succeeding Eric Lloyd as CEO on January 1, 2026.

Valuation and Outlook

With a Price-to-Book Ratio (P/B) of 0.8, BBDC's stock appears to be trading at a discount to its book value. The Dividend Yield is 13.42%, which is attractive for income investors. Analysts estimate next year's revenue growth at -7.1%, but the company's focus on core middle market strategies, defensive non-cyclical sectors, and a global footprint offers investors strong relative value and differentiation within the BDC landscape.

Share Buybacks and Repayment Velocity

The company had $86 million in historical share buybacks, but slowed in recent quarters. The company evaluates buyback opportunities consistently and was restricted from fully utilizing the program in the past quarter. A moderate uptick in repayment velocity is anticipated by year-end, but it won't significantly impact deployed capital within BBDC.

3. NewsRoom

Analyzing Oxford Square Capital (NASDAQ:OXSQ) and Barings Bdc (NYSE:BBDC)

Nov -30

Source: defenseworld.net

Barings BDC: A Rare Moment When Common Stock Beat Bonds

Nov -27

Source: seekingalpha.com

Barings BDC: Q3 Earnings Show Strong Dividend Coverage

Nov -20

Source: seekingalpha.com

Dividend Power Dogs: 12 Ideal Safer November Stars

Nov -16

Source: seekingalpha.com

Barings BDC Inc (BBDC) Q3 2025 Earnings Call Transcript

Nov -07

Source: seekingalpha.com

Barings BDC (BBDC) Beats Q3 Earnings and Revenue Estimates

Nov -07

Source: zacks.com

Barings BDC, Inc. Announces Chief Executive Officer Transition

Nov -06

Source: businesswire.com

Barings BDC, Inc. Reports Third Quarter 2025 Results

Nov -06

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (9.90%)

6. Segments

Lending and Investment

Expected Growth: 9.9%

Barings BDC, Inc.'s 9.9% growth in Lending and Investment is driven by a strong demand for middle-market loans, expansion into new industries, and a diversified investment portfolio. Additionally, the company's strategic partnerships, efficient cost structure, and experienced management team have contributed to its growth momentum.

7. Detailed Products

Senior Secured Loans

Barings BDC, Inc. provides senior secured loans to middle-market companies, offering a flexible and customized financing solution to meet their capital needs.

Unitranche Loans

Barings BDC, Inc. offers unitranche loans, which combine senior and subordinated debt into a single loan facility, providing a simplified and efficient financing solution.

Second Lien Loans

Barings BDC, Inc. provides second lien loans, which offer a subordinated debt solution for companies seeking additional capital without diluting equity.

Equity Co-Investments

Barings BDC, Inc. makes equity co-investments alongside its debt investments, providing additional capital and support to its portfolio companies.

Structured Equity

Barings BDC, Inc. offers structured equity solutions, which combine debt and equity features to provide a customized financing solution.

8. Barings BDC, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Barings BDC, Inc. is medium due to the presence of alternative investment options for investors, such as other BDCs and private equity firms.

Bargaining Power Of Customers

The bargaining power of customers for Barings BDC, Inc. is low due to the company's diversified portfolio and lack of dependence on a single customer.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Barings BDC, Inc. is medium due to the company's reliance on a few large financial institutions for funding.

Threat Of New Entrants

The threat of new entrants for Barings BDC, Inc. is high due to the relatively low barriers to entry in the BDC industry and the increasing popularity of BDCs as an investment option.

Intensity Of Rivalry

The intensity of rivalry for Barings BDC, Inc. is high due to the competitive nature of the BDC industry and the presence of several established players.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	54.63%
Debt Cost	5.96%
Equity Weight	45.37%
Equity Cost	7.30%
WACC	6.57%
Leverage	120.39%

11. Quality Control: Barings BDC, Inc. passed 3 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Runway Growth Finance

A-Score: 7.7/10

Value: 7.5

Growth: 8.3

Quality: 7.0

Yield: 10.0

Momentum: 4.0

Volatility: 9.3

1-Year Total Return ->

Medallion Financial

A-Score: 7.0/10

Value: 8.9

Growth: 7.7

Quality: 5.6

Yield: 7.0

Momentum: 7.0

Volatility: 6.0

1-Year Total Return ->

Barings BDC

A-Score: 6.8/10

Value: 6.4

Growth: 5.1

Quality: 6.3

Yield: 10.0

Momentum: 3.0

Volatility: 10.0

1-Year Total Return ->

Navient

A-Score: 6.3/10

Value: 9.6

Growth: 5.0

Quality: 5.6

Yield: 8.0

Momentum: 3.0

Volatility: 6.3

1-Year Total Return ->

Farmer Mac

A-Score: 6.1/10

Value: 6.2

Growth: 8.3

Quality: 4.6

Yield: 7.0

Momentum: 3.0

Volatility: 7.7

1-Year Total Return ->

Oaktree Specialty Lending

A-Score: 5.8/10

Value: 5.6

Growth: 2.7

Quality: 5.5

Yield: 10.0

Momentum: 1.5

Volatility: 9.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-2.21%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

6.57%

Barings BDC, Inc. - US06759L1035

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on BBDC

1.c. Company Highlights

Higher Yield

Medium Volatility

Stable Momentum

Earnings Miss

Revenues Miss

Less Volatile

Fairly Valued

Earnings Beats

Revenues Beats

Average Growth

Better Quality

Cheaper

Weak Momentum

2. BBDC Beats Earnings Expectations with Strong NII

Portfolio Quality and Composition

Capital Structure and Funding

Valuation and Outlook

Share Buybacks and Repayment Velocity

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (9.90%)

6. Segments

Lending and Investment

Expected Growth: 9.9%

7. Detailed Products

Senior Secured Loans

Unitranche Loans

Second Lien Loans

Equity Co-Investments

Structured Equity

8. Barings BDC, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Barings BDC, Inc. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

8.78$

Current Price

8.78$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA