Carlyle Secured Lending Q1 Results Revealed: Is CGBD Overperforming with 10.7% Dividend Yield?

New York, NY – Carlyle Secured Lending (NASDAQ: CGBD) has recently released its Q1 results, showcasing a dividend yield of 10.7% and a 3% premium to NAV. The company’s net investment income price yield stands at 12.7%, exceeding the sector median level by over 1%.

Carlyle Secured Lending maintains a typical BDC portfolio profile, with a substantial first lien allocation of over 80%. The median company EBITDA sits at $81 million, positioning it well within the middle-market segment. Its sector exposure leans towards Business Services and Healthcare, aligning with the trends observed in the BDC space.

Adjusted net income for the quarter came in at $0.54, slightly lower than the previous quarter. The company declared a total dividend of $0.47, consisting of a $0.40 base dividend and a $0.07 supplemental dividend, indicating a small decrease from the preceding quarter.

The company’s dividend performance has trailed behind the sector due to its heavier reliance on floating-rate liabilities, which have impacted net income as short-term rates increased in recent years. However, this strategy may mitigate potential net income declines if short-term rates decrease in the near future.

Carlyle Secured Lending introduced a new supplemental dividend framework, aligning with similar initiatives undertaken by other BDCs. The company plans to distribute at least half of the excess net income through supplemental dividends.

The NAV of the company experienced a modest increase of close to 0.5%, primarily attributed to retained income. This marks the third consecutive quarterly rise for the NAV, nearing its 5-year peak.

Furthermore, Carlyle Secured Lending reported a decrease in non-accruals to 0.2% following a recapitalization of a previously troubled position. The company has maintained a clean portfolio, showing no new non-accruals or additions to the watch list in recent quarters.

Carlyle Secured Lending has demonstrated consistent performance, with solid total NAV returns over various periods. The company’s valuation has recently surged past 100% and is now trading at a premium level, diverging significantly from historical averages. The valuation gap with the broader sector has narrowed to less than 5%, signaling positive momentum for the company.