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Golub Capital (GBDC) Stock Up on Q4 Earnings Meet, Costs Rise

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·3 min read
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  • GBDC
  • HTGC
  • ARCC

Shares of Golub Capital BDC, Inc. GBDC gained 1.3% following the release of its fiscal fourth-quarter 2021 (ended Sep 30) results. Adjusted net investment income of 30 cents per share met the Zacks Consensus Estimate. The figure indicates a rise of 3.4% from the previous quarter’s reported number.

The company recorded an increase in total investment income in the reported quarter. The balance sheet position remained strong and new commitments were robust. However, an increase in expenses hurt results to some extent.

Net investment income was $46.3 million, up 10% sequentially.

Total Investment Income Improves, Expenses Rise

Total investment income was $81.1 million, up 7% from the previous quarter. The rise was primarily driven by an increase in interest income and dividend income. The top line, however, marginally lagged the Zacks Consensus Estimate of $81.4 million.

Total expenses rose 3.3% from the previous quarter to $34.8 million. The rise resulted from an increase in interest and other debt financing expenses, and incentive fees.

Portfolio Activity Decent

The fair value of Golub Capital’s total investment portfolio was $4.89 billion as of Sep 30, 2021.

In the reported quarter, new investment commitments totaled $971.4 million.

Balance Sheet Position Strong

As of Sep 30, 2021, Golub Capital’s net asset value was $15.19 per share compared with $15.06 as of Jun 30, 2021.

As of Sep 30, 2021, the company had cash, cash equivalents and foreign currencies of $181.1 million, and restricted cash, cash equivalents and foreign currencies of $63.3 million.

As of the same date, the total debt was $2.57 billion. The company had $77.9 million of remaining commitments, subject to leverage and borrowing base restrictions as of Sep 30, 2021. Its revolving credit facilities with various banks had a total available balance of $77.9 million.

Our Take

The company’s strong portfolio activity is likely to act as a tailwind, which is expected to support its top line in the coming quarters. However, mounting expenses remains a major near-term concern.

Golub Capital BDC, Inc. Price, Consensus and EPS Surprise

Golub Capital BDC, Inc. Price, Consensus and EPS Surprise
Golub Capital BDC, Inc. Price, Consensus and EPS Surprise

Golub Capital BDC, Inc. price-consensus-eps-surprise-chart | Golub Capital BDC, Inc. Quote

Currently, Golub Capital carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Finance Companies

TriplePoint Venture Growth BDC Corp.’s TPVG third-quarter 2021 (ended Sep 30) net investment income was 32 cents per share, missing the Zacks Consensus Estimate of 35 cents. TPVG’s bottom line declined 20% from the year-ago quarter.

TriplePoint’s results reflected a decline in total investment income and higher expenses. Nonetheless, TPVG’s robust portfolio activity was a tailwind.

Hercules Capital Inc.’s HTGC third-quarter 2021 net investment income of 33 cents per share beat the Zacks Consensus Estimate by a penny. HTGC’s bottom line was 2.9% down from the year-ago quarter figure.

Hercules Capital recorded a marginal fall in total investment income and higher expenses in the quarter. HTGC’s balance sheet position remained strong and new commitments were robust.

Ares Capital Corporation’s ARCC third-quarter 2021 core earnings of 47 cents per share beat the Zacks Consensus Estimate of 45 cents. ARCC’s bottom line reflected a rise of 20.5% from the prior-year quarter.

Ares Capital’s results were aided by a rise in total investment income. ARCC’s portfolio activity remained solid in the quarter. However, an increase in expenses was the undermining factor.


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Hercules Capital, Inc. (HTGC) : Free Stock Analysis Report

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TriplePoint Venture Growth BDC Corp. (TPVG) : Free Stock Analysis Report

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