Golub Capital Stock Dividend Yield and Investment Analysis

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Golub Capital is a business development company that offers a range of investment options, including its Golub Capital BDC stock.

The company has a strong track record of generating returns for its shareholders, with a dividend yield that's significantly higher than the industry average.

Golub Capital's dividend yield is around 8-10%, which is attractive to investors looking for regular income.

One of the key factors contributing to Golub Capital's high dividend yield is its ability to generate consistent cash flows from its investments.

Dividend Information

Golub Capital BDC's dividend yield has been steadily increasing over the years, reaching a high of 10.3% in 2019.

The company's dividend payout ratio has been relatively stable, averaging around 95% of its available income from 2015 to 2020.

Golub Capital BDC's dividend per share has also seen a significant increase, rising from $1.72 in 2015 to $2.38 in 2020.

Payout Ratio

The payout ratio is a key metric to consider when evaluating dividend stocks. GBDC has a payout ratio of 138.2%, which is significantly higher than the industry average. GBDC's payout ratio is 204% higher than the Financial Services sector average of 45.5%. This means that GBDC pays out a substantial amount of its earnings as dividends.

Does Pay a?

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Golub Capital BDC has been paying dividends for the last 15 years, so you can count on a long history of income.

The company's dividend yield is more than the Financial Services sector average, making it a good choice for investors looking for a strong dividend.

Golub Capital BDC's last regular dividend was on Dec 9, 2024, with a payout of $0.39 per share.

You can track the company's dividend growth over time to see how its earnings and payout ratios have evolved, giving you insight into its potential for future income.

Golub Capital BDC has paid a dividend of $1.88 per share in the last year, providing a significant income stream for investors.

Dividend Yield

Golub Capital BDC's dividend yield is a standout feature, currently sitting at 11.95%. This is a significant number that can be attractive to income-oriented investors.

The company has a long history of paying dividends, dating back to 2010. GBDC has issued nine dividends in the last twelve months, with an annualized DPS growth of 25% over the last year.

Despite the economic challenges, Golub Capital BDC's Q4 performance was strong, with adjusted net income driving the company's success. This performance has helped maintain the company's position as a top BDC for income.

Yield

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Golub Capital BDC's ultra-high dividend yield of 9.5% is a result of the company being registered as a Regulated Investment Company (RIC), which requires it to return at least 90% of its income to investors to avoid paying federal taxes.

This yield is significantly higher than many other dividend-paying stocks, and it's essential to understand the company's dividend payout ratio to gauge the safety of the dividend. However, the payout ratio of nearly 181% might raise concerns, but it's essential to note that the company expects to reverse a significant portion of its unrealized losses over time.

One of the key factors to consider when evaluating the dividend yield is the company's ability to generate consistent cash flow. Golub Capital BDC's average cash flow over the past 5.5 years is greater than 12.46% of current dividend-paying stocks in the US, indicating a relatively stable financial position.

Another crucial aspect to consider is the company's dividend history and growth. Golub Capital BDC has paid dividends since 2010, and the company has raised the dividend twice since reducing it in 2020 due to the COVID-19 pandemic. The company's quarterly update earlier this month suggests that it may consider increasing the dividend in the near future.

Here are some key dividend metrics for Golub Capital BDC:

These metrics provide a snapshot of the company's dividend yield, annual dividend, and payout ratio. However, it's essential to consider the company's overall financial health and dividend growth prospects when evaluating the dividend yield.

What Is Yield?

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Yield is a crucial concept in the world of finance, and it's essential to understand what it means. GOLUB CAPITAL BDC's current dividend yield is 11.95%.

Dividend yield is the ratio of a stock's annual dividend payment to its current stock price. This is often expressed as a percentage.

A higher dividend yield typically indicates that a stock is cheaper and may be a more attractive investment option. For example, GOLUB CAPITAL BDC's dividend yield is significantly higher than many other stocks.

Investors often use dividend yield to compare the attractiveness of different dividend-paying stocks. By comparing the dividend yield of GOLUB CAPITAL BDC to other stocks, investors can make more informed decisions about their investments.

A high dividend yield can be a sign of a stock's potential for long-term growth, but it's essential to consider other factors as well.

Investment Analysis

Golub Capital BDC's dividend yield is quite attractive, but it's essential to consider the potential risks involved. Its business model comes with risks, especially potential losses from defaults.

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The stock's high dividend yield is a major draw, but its share price has actually declined over the last 10 years. This means the total return lags behind the S&P 500.

As an income investor, it's crucial to look beyond just the dividend yield. There are better alternatives available that offer more stability and potential for growth.

GBDC vs. Peers

Golub Capital BDC, Inc. (GBDC) is among the BDCs listed, but it's not the only one. GBDC has a dividend yield of 0.00%, which is the same as many of its peers.

In fact, 29 out of the 60 listed BDCs have a dividend yield of 0.00%. This is a significant number, and it suggests that many BDCs are not currently offering a dividend yield.

GBDC's ranking is 21 out of 60, which is not particularly high or low. It's actually in the middle of the pack.

Here's a list of the top 5 BDCs with a dividend yield of 0.00%:

These BDCs are all at the bottom of the list in terms of dividend yield, which may be a concern for investors looking for income.

An Investor's Dream?

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An investor's dream may not be as appealing as it seems. Golub Capital BDC has a high dividend yield, but its share price has declined over the last 10 years.

This decline in share price means that the stock's total return lags behind the S&P 500. The S&P 500 is a widely followed stock market index that provides a benchmark for investors.

Investors should consider the risks associated with Golub Capital BDC, including potential losses from defaults. Defaults can be costly and may erode the value of the investment.

The fact that Warren Buffett owns Golub Capital BDC indirectly may give the stock an extra measure of appeal. However, this alone is not enough to make it an attractive investment.

Financial Performance

Golub Capital BDC delivered a solid quarter with a 2.8% total NAV return. This is a notable achievement, especially considering the company's consistent track record.

The firm trades at a 10% dividend yield, which is a significant advantage for investors. This yield is a key factor to consider when evaluating the stock's potential for growth.

Golub Capital's portfolio is well-diversified with 386 positions, providing a stable foundation for the company's financial performance.

A Solid Result from Consistency

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Golub Capital BDC, Inc. (GBDC) has a solid track record of delivering consistent financial performance.

The company's dividend yield is an attractive 10%, making it a compelling option for income-seeking investors.

GBDC's dividend history shows a consistent payout of $0.39 per share, with some occasional smaller payments.

The table below breaks down GBDC's dividend history over the past year:

This consistency is a testament to GBDC's well-diversified portfolio, which includes 386 positions.

Q4 Income Top

Golub Capital BDC is a solid buy opportunity for income-oriented investors, trading at a slight discount to NAV.

Golub Capital BDC's Q4 performance was strong, with adjusted net income showing a notable improvement.

Trading at a slight discount to NAV provides a margin of safety for investors, making Golub Capital BDC an attractive option despite economic challenges.

GBDC's Q4 performance was strong, offering a promising outlook for the company's future financial performance.

A slight discount to NAV can also indicate a buying opportunity, as investors may be overlooking the company's potential for growth.

Retirement Investment

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As Golub Capital's stock dividend yield is a key factor in determining its attractiveness for retirement investors, it's essential to understand how to invest wisely.

Golub Capital's dividend yield can be a significant source of income for retirees, with a yield of around 4.5% in 2022.

Investing in dividend-paying stocks like Golub Capital can provide a relatively stable source of income, as the company has consistently paid dividends over the years.

The company's dividend payout ratio is around 50%, indicating that it has a solid balance sheet to support its dividend payments.

Retirees can consider investing in a mix of dividend-paying stocks, bonds, and other fixed-income securities to create a diversified portfolio.

Golub Capital's stock has historically performed well during economic downturns, making it a potential safe-haven investment for retirees.

Investors should consider their individual financial goals and risk tolerance before investing in Golub Capital or any other stock.

By understanding the company's dividend yield and history, retirees can make informed investment decisions to support their retirement goals.

Frequently Asked Questions

How often does Golub Capital pay dividends?

Golub Capital pays dividends every three months. The dividend payment schedule is consistent, with a new payment date following each quarterly ex-dividend date.

Is GBDC a qualified dividend?

GBDC distributions are not considered qualified dividends for tax purposes. This means you may be subject to ordinary income tax rates on your GBDC distributions.

Matthew McKenzie

Lead Writer

Matthew McKenzie is a seasoned writer with a passion for finance and technology. He has honed his skills in crafting engaging content that educates and informs readers on various topics related to the stock market. Matthew's expertise lies in breaking down complex concepts into easily digestible information, making him a sought-after writer in the finance niche.

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