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High Dividend 50: Barings BDC


Published on October 21st, 2025 by Felix Martinez

High-yield stocks pay out dividends that are significantly higher than the market average. For example, the S&P 500’s current yield is only ~1.2%.

High-yield stocks can be particularly beneficial in supplementing income after retirement. A $120,000 investment in stocks with an average dividend yield of 5% creates an average of $500 a month in dividends.

Barings BDC (BBDC) is part of our ‘High Dividend 50’ series, which covers the 50 highest-yielding stocks in the Sure Analysis Research Database.

We have created a spreadsheet of stocks (and closely related REITs, MLPs, etc.) with dividend yields of 5% or more.

You can download your free full list of all securities with 5%+ yields (along with important financial metrics such as dividend yield and payout ratio) by clicking on the link below:

 

Click here to instantly download your free high dividend stocks spreadsheet now, along with important investing metrics.

Next on our list of high-dividend stocks to review is Barings BDC (BBDC).

Business Overview

Barings BDC, Inc. is a publicly traded business development company (BDC) that provides senior secured loans to middle-market companies in the U.S. and select international markets. Managed by Barings LLC, a global asset manager with over $450 billion in assets under management, the company focuses on businesses with EBITDA between $10 million and $75 million—well-established firms with stable cash flows in less cyclical industries.

The firm aims to generate attractive risk-adjusted returns through disciplined investing, prudent leverage, and capital preservation. Its diversified portfolio includes direct lending, credit support agreements, and selective equity investments. Strategic acquisitions, such as MVC Capital and Sierra Income Corporation, have strengthened its market presence and expanded its investment capabilities.

Barings BDC balances growth with risk management while providing consistent income to shareholders. The company maintains a dividend reinvestment plan and an active share repurchase program, supported by strong liquidity and the global Barings platform, positioning it to continue delivering long-term shareholder value.

Source: Investor Relations

The company reported strong financial results for the second quarter of 2025, with net investment income (NII) of $29.8 million, or $0.28 per share, exceeding analyst expectations by $0.02 per share. Total investment income reached $74.4 million, reflecting a slight year-over-year decline of 0.65% but surpassing projections by $7.98 million. The company declared a quarterly cash dividend of $0.26 per share, fully covered by NII, and continues to maintain disciplined credit management, with non-accruals representing just 0.5% of the portfolio. During the quarter, Barings BDC deployed approximately $199 million into new and existing investments, while maintaining over $322 million of available capital to pursue additional income-generating opportunities.

The company’s net asset value (NAV) per share decreased slightly to $11.18 from $11.29 at the end of Q1 2025, primarily due to net realized losses, foreign currency fluctuations, and a $0.05 special dividend, partially offset by net unrealized appreciation and NII exceeding dividend payouts. Portfolio activity included 19 new investments totaling $137.3 million, $61.7 million in follow-on investments, and $59.1 million in loan repayments, resulting in net realized gains and losses from sales and restructurings of $(9.3) million. Net unrealized appreciation totaled $5.9 million, driven by portfolio performance, currency effects, and reclassification adjustments.

Barings BDC ended Q2 2025 with total assets of $2.79 billion, debt of $1.57 billion, and total net assets of $1.18 billion, resulting in a net debt-to-equity ratio of 1.29x. The company repurchased 100,000 shares at an average price of $8.88 during the quarter as part of its ongoing share repurchase program. Subsequent to quarter-end, BBDC committed $59.3 million to new investments and fully repaid $38.6 million of maturing Series A notes. With a robust balance sheet, disciplined investment strategy, and ongoing capital deployment, Barings BDC remains well-positioned to generate attractive, risk-adjusted returns for shareholders.

Growth Prospects

Barings BDC’s net investment income (NII) per share from 2015 to 2024 reflects both market conditions and a strategic shift in its investment approach. In 2015, under its former name Triangle Capital, NII reached $2.16, driven by a focus on lower middle-market investments and strong capital deployment, despite challenges like yield compression and rising nonaccruals. NII declined to $1.62 in 2016 and $1.55 in 2017 due to increased competition, portfolio rotation for improved asset quality, and continued pressure on returns.

The company underwent a major transition in 2018, selling its legacy portfolio for nearly $1 billion and externalizing management to Barings LLC, effectively resetting its operations. In 2019, NII declined to $0.61 as Barings BDC shifted its focus toward first-lien senior secured loans to prioritize risk reduction and capital preservation. NII gradually recovered to $0.64 in 2020 and $0.90 in 2021, supported by increased loan originations and improved economic conditions. Growth continued in 2022 and 2023, reaching $1.12 and $1.19, driven by rising interest rates and strong credit performance, before stabilizing in 2024 amid declining yields.

Looking ahead, NII per share is expected to grow at a modest 1% CAGR, reflecting normalization after a favorable market environment. Barings BDC has also increased its dividend for five consecutive years, and payouts are projected to grow at a similar 1% CAGR through 2030, reflecting steady income generation and disciplined capital management.

Source: Investor Relations

Competitive Advantages & Recession Performance

Barings BDC’s competitive edge comes from its disciplined strategy, experienced management, and access to the global Barings platform. By focusing on senior secured loans to stable, middle-market companies and utilizing prudent leverage, the firm generates strong, risk-adjusted returns while maintaining capital preservation. Strategic acquisitions like MVC Capital and Sierra Income have expanded its portfolio and market presence.

The company has proven resilient in economic downturns. Its first-lien, senior secured lending approach, conservative underwriting, and diversified portfolio keep non-accruals low and income stable, allowing Barings BDC to maintain consistent dividends even during recessions.

The company performed well during the previous major economic downturn, the Great Recession of 2008-2009:

Source: Investor Relations

Dividend Analysis

Barings BDC’s annual dividend is $1.04 per share. At its recent share price, the stock has a high yield of 12.1%.

Given the company’s earnings outlook for 2025, NII is expected to be $1.10 per share. As a result, the company is expected to pay out roughly 95% of its NII to shareholders in dividends.

The dividend appears sustainable, and we estimate that the company will continue to experience dividend growth going forward. Overall, the 12.1% dividend yield is attractive for investors who prioritize income.

Final Thoughts

Barings BDC has experienced volatile NII and dividends historically, but its performance has stabilized in recent years. Its focus on senior secured middle-market loans and disciplined investment approach makes it appealing for income-oriented investors seeking higher yields.

We project annualized returns of more than 10% through 2030, supported by the 12.1% yield and moderate portfolio growth, though valuation pressures may limit upside. Overall, the stock is rated a hold, with caution advised regarding the reliability of the dividend.

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