In this article, we will take a look at the 10 Best BDC Stocks to Buy Right Now.
Business development companies (BDCs) are publicly traded investment vehicles that lend to small and mid-sized US businesses, mostly through floating-rate loans. They are required to distribute most of their taxable income. That structure makes them a common choice for income-focused investors.
A report by VanEck noted that yields across asset classes tend to move with interest rate cycles. Even so, BDC yields have historically stayed within an attractive range across different rate environments. The MVIS BDC Index dividend yield has generally remained between about 8% and 12% over the past 14 years. This held even as the effective federal funds rate moved from near zero to above 5% and then lower again.
The report also explained that falling rates can reduce the income BDCs earn on floating-rate loans. At the same time, some of that impact is offset by lower borrowing costs and the credit spreads earned above base rates. Over time, BDCs have continued to generate income across different rate environments, especially when credit fundamentals are stable.
Looking at prior cycles, the 2019 rate cuts saw BDC price-to-book ratios hold near or above 1.0x as the economic backdrop remained supportive. The 2022 to 2023 rate-hiking cycle was more favorable for earnings. Floating-rate income increased, and credit fundamentals stayed firm.
The broader point is that interest rates are only one factor. Credit performance, borrower strength, and manager quality also shape outcomes. Periods where sentiment weakens have often been followed by recoveries once underlying credit trends stabilize.
Given this, we will take a look at some of the best BDC stocks to invest in.
Our Methodology:
For this list, we screened for BDC companies and picked companies that have recently reported noteworthy developments likely to impact investor sentiment. These companies are also popular among elite funds and analysts.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).
10. Blackstone Secured Lending Fund (NYSE:BXSL)
Number of Hedge Fund Holders: N/A
On April 16, Keefe Bruyette lowered its price recommendation on Blackstone Secured Lending Fund (NYSE:BXSL) to $26 from $27. It reiterated an Outperform rating on the stock.
During the Q4 2025 earnings call, Brad Marshall, Trustee, Chairman, and Co-CEO, said the company delivered another solid quarter. He noted that net investment income was $0.80 per share, equal to an 11.8% annualized return on equity. Most of that income came from interest, with only a small portion from PIK or dividends. He also said the company paid a distribution of $0.77 per share. That payout was fully covered by earnings, with coverage at 104% of net investment income per share. In his view, this represented an 11.4% annualized yield based on NAV.
Regarding investments, he noted that activity increased during the quarter. He described Q4 as the firm’s second-most-active funding period since 2021. The portfolio expanded to 316 companies, including 13 new credit investments. These were completed at an average loan-to-value of 41% and spreads of roughly 500 basis points.
He also mentioned several key transactions, including investments in AmTrust, Mankind, IEM, and Saber Power, along with a co-led deal involving Jefferson, a digital aviation solutions company.
Blackstone Secured Lending Fund is an externally managed, non-diversified, closed-end investment company. Its main goal is to generate current income, with some focus on long-term capital appreciation. The firm invests at least 80% of its assets in secured debt.
9. Horizon Technology Finance Corporation (NASDAQ:HRZN)
Number of Hedge Fund Holders: 6
On April 16, Horizon Technology Finance Corporation (NASDAQ:HRZN), an affiliate of Monroe Capital, announced that it provided a delayed draw senior credit facility of up to $25 million to Stellar Cyber, Inc. to support its continued growth.
Stellar Cyber has built an AI-native, open, and unified security operations platform. It helps organizations detect and respond to cyber threats more efficiently by bringing security data into a single environment. The platform is designed for managed security service providers and enterprise security teams, and it comes with more than 500 integrations with third-party security tools out of the box.
Through its MSSP partners, the company’s technology supports over 14,000 organizations across more than 50 countries. Stellar Cyber is backed by investors such as Highland Capital Partners, Susquehanna Ventures, and Valley Capital Partners.
Horizon Technology Finance Corporation operates as a specialty finance company. It provides secured loans to venture capital-backed businesses in technology, life sciences, healthcare information and services, and sustainability.
8. Crescent Capital BDC, Inc. (NASDAQ:CCAP)
Number of Hedge Fund Holders: 7
On April 16, Keefe Bruyette analyst Paul Johnson lowered the firm’s price recommendation on Crescent Capital BDC, Inc. (NASDAQ:CCAP) to $15 from $15.50. It reiterated an Outperform rating on the shares.
During the Q4 2025 earnings call, CEO Jason Breaux said net investment income came in at $0.45 per share, slightly below $0.46 in the prior quarter. He noted that earnings still covered the company’s quarterly dividend. He also announced a cash dividend of $0.42 per share for Q1 2026. Net asset value was $19.10 per share, down from $19.28 in the previous quarter. He said the decline was driven by unrealized losses in certain portfolio holdings, while adding that the broader portfolio remained in solid shape. Credit metrics stayed stable, sponsor support remained strong, and performance was in line with underwriting expectations.
Looking ahead, he said management and the Board were reviewing a range of strategic options to improve the company’s ability to generate consistent earnings and deliver returns across different market conditions. A more detailed update, along with any actions, is expected in May.
Crescent Capital BDC, Inc. operates as a specialty finance company focused on lending to middle-market businesses. Its goal is to maximize total returns for shareholders through current income and capital appreciation, primarily through debt and related equity investments.
7. Sixth Street Specialty Lending, Inc. (NYSE:TSLX)
Number of Hedge Fund Holders: 8
On April 22, Citizens analyst Brian McKenna lowered the firm’s price recommendation on Sixth Street Specialty Lending, Inc. (NYSE:TSLX) to $24 from $25. It reiterated an Outperform rating on the shares. He described Q1 as a pivotal period for private capital. In his view, attention is shifting back to underlying fundamentals, even with recent volatility and concerns around non-traded BDC flows. He noted that valuation multiples are sitting at multi-cycle lows, while fundamentals continue to hold up. He pointed to strength in institutional fundraising, deployment, and monetization. As that gap between perception and actual performance narrows, he expects valuations to recover.
During the Q4 2025 earnings call, CEO Robert Stanley reported adjusted net investment income of $0.52 per share and adjusted net income of $0.30 per share. He said this equated to an annualized operating return on equity of 12% and a net income ROE of 7%.
He also noted that adjusted net investment income exceeded the base dividend of $0.46 per share, implying dividend coverage of about 113%.
Sixth Street Specialty Lending, Inc. operates as a specialty finance company focused on lending to middle-market businesses. It aims to generate current income mainly through direct originations of senior secured loans to U.S.-based companies, along with selective investments in mezzanine loans, corporate bonds, equity securities, and other instruments.
6. Trinity Capital Inc. (NASDAQ:TRIN)
Number of Hedge Fund Holders: 11
On April 30, Trinity Capital Inc. (NASDAQ:TRIN) announced a commitment of up to $35 million in equipment financing to Torus, a US-based company working to build the next generation of energy infrastructure.
Torus designs, engineers, and manufactures distributed mesh energy systems that deliver scalable, secure, and reliable power. The goal is to lower costs, improve resilience, and meet growing demand driven by electrification and AI-related load growth. Its platform brings together battery and inertial-based storage, AI-powered management, cybersecurity, and long-term operations and maintenance. It serves utilities, data centers, manufacturers, and commercial and industrial facilities.
Ryan Little, Senior Managing Director of Equipment Finance at Trinity Capital, said Torus is working to address key challenges in modern energy infrastructure by moving grid-scale capabilities closer to where demand is generated. He added that the firm is supporting the company’s GigaOne buildout as it expands production capacity to meet rising demand.
The financing is expected to help Torus scale manufacturing and increase output at its GigaOne manufacturing and assembly facility.
Trinity Capital Inc. operates as an internally managed, closed-end, non-diversified investment company structured as a business development company. It provides debt, including loans and equipment financing, to growth-stage businesses, including venture-backed companies and those supported by institutional investors.
5. Barings BDC, Inc. (NYSE:BBDC)
Number of Hedge Fund Holders: 13
On April 28, Lucid Capital initiated coverage of Barings BDC, Inc. (NYSE:BBDC) with a Neutral rating and a $9.25 price target. The analyst said the company benefits from access to a broad range of sponsor deal flow, along with “differentiated non-sponsor transactions and distinct platform investments.” In the same note, the firm added that near-term multiple expansion may be limited without a broader rerating across the industry.
During the Q4 2025 earnings call, CFO Elizabeth Murray indicated that heading into 2026, a decline in base rates, as suggested by the forward SOFR curve, could weigh on net investment income. He said this could put pressure on the company’s regular dividend, which may come down from current levels.
Management also pointed to the possibility of a lower base dividend in 2026. At the same time, they noted that BBDC’s diversified portfolio and strong balance sheet should provide flexibility as the rate environment shifts.
Barings BDC, Inc. is a closed-end, non-diversified investment company. Its focus is on generating current income by investing directly in privately held middle-market companies, helping fund acquisitions, growth initiatives, and refinancing needs.
4. Main Street Capital Corporation (NYSE:MAIN)
Number of Hedge Fund Holders: 21
On April 22, Citizens lowered its price target on Main Street Capital Corporation (NYSE:MAIN) to $70 from $74 and maintained an Outperform rating on the shares. In a research note, the analyst described Q1 as an important period for private capital. The focus, in their view, is starting to shift back to underlying fundamentals, even with recent market volatility and ongoing concerns around non-traded BDC flows. They pointed out that valuation multiples are at multi-cycle lows, while fundamentals remain steady. Areas like institutional fundraising, capital deployment, and monetization continue to hold up. As that gap between market perception and actual performance narrows, the firm believes valuations could begin to recover.
On April 21, Main Street announced that it had completed a follow-on investment in an existing portfolio company, UBM ParentCo, LLC, which operates as United Business Mail. UBM is a provider of “marketing mail” commingle services, focused on improving postage efficiency, transportation, and delivery performance for large-scale mailers.
Main Street, together with its co-investor MSC Income Fund, made the additional investment to support UBM’s acquisition of a national provider of asset-light palletized mail consolidation, mail optimization services, freight brokerage, and warehousing and distribution. The target company serves both B2B and B2C customers. Main Street’s portion of the follow-on investment included $15.6 million in first lien, senior secured term debt. Both Main Street and the MSC Income Fund first invested in UBM in December 2025.
Main Street Capital Corporation operates as a principal investment firm. It provides long-term debt and equity capital to lower middle market companies, along with debt financing to private businesses owned by, or being acquired by, private equity funds.
3. Hercules Capital, Inc. (NYSE:HTGC)
Number of Hedge Fund Holders: 23
On April 22, Citizens analyst Devin Ryan lowered the firm’s price recommendation on Hercules Capital, Inc. (NYSE:HTGC) to $22 from $24. It reiterated an Outperform rating on the shares. In a research note, he described Q1 as a key period for private capital. He said attention is shifting back to underlying fundamentals, even with recent volatility and concerns around non-traded BDC flows. He pointed out that valuation multiples are at multi-cycle lows, while fundamentals continue to hold up. He highlighted strength in institutional fundraising, deployment, and monetization. As the gap between perception and actual performance narrows, the firm expects valuations to recover.
Earlier in April, Hercules Capital announced a new all-time record of debt and equity commitments for the first quarter of 2026. For the three months ended March 31, 2026, the company originated $1.81 billion in new commitments across 16 new and 12 existing portfolio companies.
Hercules Capital, Inc. is a specialty finance company focused on providing senior secured venture growth loans to high-growth, venture-backed companies across technology and life sciences sectors.
2. Golub Capital BDC, Inc. (NASDAQ:GBDC)
Number of Hedge Fund Holders: 24
On April 17, RBC Capital analyst Kenneth Lee initiated coverage of Golub Capital BDC, Inc. (NASDAQ:GBDC) with an Outperform rating. The analyst also set a $15 price target on the stock. In a research note, he said that with investors focused on credit, RBC favors Golub’s long-term record of lower loss experience compared to peers and its reputation as a disciplined credit underwriter. He also noted that the company’s portfolio is “relatively differentiated,” with a focus on the core middle-market segment.
With Q1 earnings approaching, management had already taken a cautious stance during the Q4 2025 call. They indicated that current headwinds are likely to persist and that the firm is preparing for a challenging 2026. They also said the dividend framework has been reset, with a base distribution of $0.33 per share and a variable component equal to 50% of earnings above that level.
Management added that the current environment, including lower base rates, tighter spreads, softer M&A activity, and continued credit pressure, is expected to remain in place.
Golub Capital BDC, Inc. is an externally managed, non-diversified closed-end investment company. Its objective is to generate current income and capital appreciation by investing mainly in one-stop and other senior secured loans to U.S. middle-market companies.
1. Ares Capital Corporation (NASDAQ:ARCC)
Number of Hedge Fund Holders: 28
On April 29, B. Riley lowered its price recommendation on Ares Capital Corporation (NASDAQ:ARCC) to $20 from $22. It reiterated a Buy rating on the shares. In a research note, the analyst said the company reported mixed Q1 results. Net investment income came in below expectations, and NAV declined, mainly due to portfolio markdowns.
During the Q1 2026 earnings call, CEO Kort Schnabel said the company generated core earnings of $0.47 per share. He noted that the market appears to be going through a reset, with wider spreads, lower leverage, and more favorable deal terms starting to show up. He added that new deals are being discussed with an extra 50 to 75 basis points in fees and spreads. He also pointed out that the company’s roughly $6 billion in available liquidity puts it in a strong position, especially as market volatility and retail outflows reduce competitive pressure.
Ares Capital Corporation is a specialty finance company focused on providing direct loans and other investments to private middle-market companies in the United States. It primarily invests in first lien senior secured loans, including unitranche structures, as well as second lien senior secured loans.
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