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Goldman Sachs BDC (GSBD) Q1 Earnings In Line, Expenses Jump

Goldman Sachs BDC’s GSBD first-quarter 2021 adjusted net investment income of 48 cents per share came in line with the Zacks Consensus Estimate. Also, the bottom line grew 6.7% from the year-ago figure.

Results benefited from drastic improvement in total investment income. Also, rise in net asset value and solid investment portfolio balance were tailwinds. However, higher operating expenses acted as an undermining factor.

After considering non-recurring items, net investment income was $57.6 million, up substantially from the prior-year quarter’s $18.1 million.

Total Investment Income & Expenses Surge

Total investment income was $82.6 million, jumping significantly from $32 million in the year-ago quarter. The top line surpassed the Zacks Consensus Estimate of $78 million.

Total expenses surged significantly year over year to $37.3 million. Increase in all expense components led to the rise. Further, during the quarter, the company recorded fee waivers of $12.6 million.

The fair value of Goldman Sachs BDC’s total investment portfolio was $3.2 billion as of Mar 31, 2021, consisting of investments in 118 portfolio companies across 38 industries.

In the reported quarter, the company delivered $188.3 million in new debt and equity commitments across four new and nine existing portfolio companies.

Strong Balance Sheet & Liquidity Position

As of Mar 31, 2021, Goldman Sachs BDC’s net asset value was $16.00 per share compared with $15.91 as of Dec 31, 2020.

As of Mar 31, 2021, the company had $1.61 billion of total principal amount of debt outstanding. It comprised $593 million of outstanding borrowings under its senior secured revolving credit facility, $155 million of unsecured convertible notes and $360 million of unsecured notes due 2025, and $500.0 million of unsecured notes due 2026.

Also, Goldman Sachs BDC had $1.1 billion of availability under its senior secured revolving credit facility, and $45.5 million in cash and cash equivalents.

Our Take

Steady improvement in total investment income and strong origination volume are anticipated to support Goldman Sachs BDC. However, mounting expenses remain a major concern.

Goldman Sachs BDC, Inc. Price, Consensus and EPS Surprise

Goldman Sachs BDC, Inc. price-consensus-eps-surprise-chart | Goldman Sachs BDC, Inc. Quote

Currently, Goldman Sachs BDC carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

 

Performance of Other Finance Stocks

Ares Capital Corporation’s ARCC first-quarter 2021 core earnings of 43 cents per share surpassed the Zacks Consensus Estimate of 42 cents. Moreover, the bottom line reflects a rise of 4.9% from the prior-year quarter’s reported number.

Hercules Capital Inc.’s HTGC first-quarter 2021 net investment income of 30 cents per share beat the Zacks Consensus Estimate by a penny. However, the bottom line declined 18.9% year over year.

TriplePoint Venture Growth BDC Corp. TPVG reported first-quarter 2021 net investment income of 29 cents per share. The bottom line plunged 29.3% from the year-ago quarter.

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Ares Capital Corporation (ARCC): Free Stock Analysis Report
 
Hercules Capital, Inc. (HTGC): Free Stock Analysis Report
 
TriplePoint Venture Growth BDC Corp. (TPVG): Free Stock Analysis Report
 
Goldman Sachs BDC, Inc. (GSBD): Free Stock Analysis Report
 
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