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Kayne Anderson BDC, Inc. (KBDC)
NYSE:KBDC
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Kayne Anderson BDC, Inc.
(NYSE:KBDC)
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Rating:67Neutral
Price Target:
$15.00
▲(10.05% Upside)
Action:ReiteratedDate:03/03/26
The score is held back primarily by elevated uncertainty in the most recent financials—2025 profitability visibility issues and a sharp swing to negative operating/free cash flow. Offsetting this are an attractive valuation (low P/E and very high yield) and a supportive earnings-call profile with stated dividend stability/coverage, strong liquidity, and low nonaccruals; technicals remain a near-term headwind given the clear downtrend versus key moving averages.
Positive Factors
Conservative credit mix
A portfolio overwhelmingly in first‑lien, senior‑secured loans with only 1.4% nonaccruals and predominantly floating rate supports durable loss mitigation and quicker recovery in stressed credits. This structural positioning reduces downside severity and underpins stable income over the next several quarters.
Strong liquidity and funding optionality
Nearly $590M of available liquidity and a debt/equity ratio inside target provide durable flexibility to cover redemptions, fund new originations, or buffer intermittent cash shortfalls. This balance sheet optionality supports disciplined deployment and reduces forced asset sales in dislocations over the medium term.
Dividend policy backed by coverage
Management’s stated $0.40 quarterly dividend with 110% coverage and undistributed NII provides a structural cushion for distributions. The explicit commitment and coverage ratio indicate prioritization of payout stability, supporting predictable income for investors through the coming year absent material credit deterioration.
Negative Factors
2025 cash flow and earnings disruption
A sudden ~-$98.7M swing to negative operating and free cash flow in 2025 and zeroed profitability lines break a multi‑year positive cash generation trend. This materially reduces visibility into distributable earnings, may require drawing liquidity or curtailing activity, and raises medium‑term funding and coverage risk.
Portfolio yield pressure from lower rates
A 30bp QoQ yield decline reflects structural repricing risk as reference rates fall; with most assets floating, NII and return on equity can compress across multiple quarters. Persistent lower yields reduce distributable income and the margin buffer available to absorb credit losses or fund growth initiatives.
Mark-to-market volatility and idiosyncratic PIK rise
NAV declines driven by realized/unrealized losses and a jump in PIK to 7.4% signal greater earnings and valuation volatility. Increased PIK reduces cash receipts, and mark‑to‑market swings can limit repurchases or force defensive actions, creating durable pressure on NAV and distributable cash in the near term.
Kayne Anderson BDC, Inc. (KBDC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
N/A
Dividend Yield13%
Average Volume (3M)413.57K
Price to Earnings (P/E)11.4
Beta (1Y)0.33
Revenue Growth22.72%
EPS Growth-28.92%
CountryUS
EmployeesN/A
SectorFinancial
Sector Strength70
IndustryAsset Management
Share Statistics
EPS (TTM)0.44
Shares Outstanding66,977,600
10 Day Avg. Volume374,112
30 Day Avg. Volume413,566
Financial Highlights & Ratios
PEG Ratio-0.30
Price to Book (P/B)0.91
Price to Sales (P/S)4.27
P/FCF Ratio-10.19
Enterprise Value/Market Cap10.00T>
Enterprise Value/Revenue10.62
Enterprise Value/Gross Profit15.76
Enterprise Value/Ebitda17.52
Forecast
1Y Price Target
$15.00Price Target Upside10.05% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
EPS Forecast (FY)1.61
Revenue Forecast (FY)$208.98M
Kayne Anderson BDC, Inc. Business Overview & Revenue Model
Company DescriptionKayne Anderson BDC, Inc invests in middle market companies located in the United States with an EBITDA of USD 10 - 150 million. The fund focuses on a broad range of sectors and industries. It provides financing in the form of senior secured loans and split-lien loans to buyout transactions.
How the Company Makes MoneyKBDC generates revenue primarily through interest income from its debt investments and dividend income from its equity investments in portfolio companies. The company typically invests in secured and unsecured debt, including senior loans, subordinated debt, and preferred equity. Additionally, KBDC may earn fees from advisory services or transactional activities related to its investments. Key revenue streams include interest payments from borrowers, capital gains from the sale of investments, and management fees from overseeing the capital allocation. The company’s partnerships with private equity firms and financial institutions also enhance its investment opportunities and access to potential revenue-generating deals.
Kayne Anderson BDC, Inc. Earnings Call Summary
Earnings Call Date:Mar 02, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 18, 2026
Earnings Call Sentiment Positive
The call presents a broadly constructive outlook with multiple strengths: solid NII and ROE, 110% dividend coverage and a committed dividend policy, strong liquidity and conservative portfolio construction (high first-lien senior secured exposure, low software concentration), active disciplined deployment and accretive share repurchases. Offsetting items include modest QoQ NAV decline driven by $7.2M of unrealized losses, a 30 bps decline in portfolio yield from lower reference rates, a temporary rise in PIK interest from one investment, and industry-wide spread and valuation pressures tied to software/AI risk. Overall, management portrays these negatives as manageable and stresses that their defensive positioning should allow them to capitalize on dislocations, so the highlights materially outweigh the lowlights.Q4-2025 Updates
Positive Updates
Net Investment Income and Profitability
Net investment income (NII) of $0.44 per share in Q4 (up from $0.43 Q3); net income per share $0.32; implied annualized return on equity of 10.8% demonstrating continued attractive risk-adjusted returns.
Dividend Coverage and Dividend Policy
Regular quarterly dividend declared at $0.40 per share; dividend coverage ratio was 110%; board expects to be able to pay the $0.40 dividend for the entirety of 2026.
Strong Portfolio Credit Quality and Structure
Only 1.4% of investments on nonaccrual (5 positions of 107); 93% of portfolio in first-lien senior secured debt; 95.7% of debt investments floating rate; weighted average borrower leverage ~4.5x and loan-to-enterprise value ~43%, reflecting conservative underwriting vs peers.
Yield and New Origination Spreads
Weighted average yield on income-producing investments ~10.3% (excluding nonaccruals); average spread on new floating-rate loans ~529 bps over SOFR (593 bps including one opportunistic investment), indicating healthy premiums in core markets.
Liquidity and Leverage Flexibility
Total liquidity of $588.4 million (cash $43.4 million, undrawn debt capacity $545 million); debt outstanding $1.13 billion; debt-to-equity ratio 1.02x (within target range 1.0x–1.25x), providing flexibility to deploy capital opportunistically.
Active, Disciplined Capital Deployment
Q4 commitments ~ $113 million and total fundings $99.3 million (new investments $72.3M, existing unfunded $27M); repayments of $131.7 million and sales of broadly syndicated loans $19.8M, reflecting active portfolio rotation into higher-yield private credit.
Diversification and Scale of Portfolio
107 portfolio companies with fair market value ~$2.2 billion; unfunded commitments $287 million; average position size ~0.9% of fair value and top 10 investments ~20% of portfolio; weighted average EBITDA ~$52.7 million.
Strategic Defensive Positioning vs Software/AI Risk
Very low exposure to software/AI dislocation at ~2% of portfolio versus many peers >20%, positioning the BDC defensively amid sector-specific headwinds and potential dispersion in outcomes across managers.
Share Repurchases and Capital Return
Share repurchases of $24.9 million in Q4 under a $100M program; YTD through Feb 20 repurchases ~$14.5 million at an average price to NAV of 87%, providing accretion to NAV.
Lower Borrowing Costs
Extended largest credit facility and reduced interest margin from SOFR +215 bps to SOFR +195 bps, lowering funding costs and supporting net yield expansion potential.
Negative Updates
NAV Decline and Mark-to-Market Losses
Net asset value per share declined to $16.32 from $16.34 (QoQ decline of $0.02). NAV was impacted by $0.12 per share of net realized and unrealized losses (Q4 unrealized losses $7.2M vs $5.0M prior quarter) partially offset by NII and repurchases.
Portfolio Yield Pressure
Portfolio yield decreased by 30 basis points QoQ (from 10.6% to ~10.3%), driven mainly by lower reference rates, which may continue to pressure NII in near term as full effect of rate cuts is realized.
Elevated PIK Interest in Quarter
PIK interest rose to 7.4% of total interest income in Q4 (3.9% for full year), driven by conversion of interest on one investment (Regiment) to PIK—a sign of idiosyncratic credit actions in the portfolio.
Net Funded Investment Activity Reduced
Net funded investment activity decreased by $52.2 million in the quarter (repayments $131.7M vs fundings $99.3M), reflecting portfolio rotation but temporarily reducing net deployment.
Modest Increase in Expenses and Realized Losses
Total expenses increased to $31.8M from $31.3M QoQ due to higher average borrowings and issued notes; small realized loss of ~$0.6M on sale of broadly syndicated loans in Q4.
Sector and Market Headwinds
Management cited industry-wide pressures: lower base rates, tight spreads, muted M&A, and a market dislocation around software/AI leading to compressed public BDC valuations and the potential for widening spreads and more dispersion among managers.
Concentration of Credit Stress in Certain Sectors
Less than 10% of portfolio on watch list with consumer pressures and management missteps cited as themes for stressed credits; 5 nonaccruals (1.4%) remain a watch item despite being low in absolute terms.
Company Guidance
Management declared a Q1 dividend of $0.40 per share (payable 04/16/2026) and said it expects to pay $0.40 per share for all of 2026, supported by a dividend coverage ratio of 110% and undistributed net investment income of ~$0.21 per share; Q4 NII was $0.44 per share (annualized ROE 10.8%) and NAV was $16.32 per share. At 12/31 the portfolio fair value was ~$2.2 billion across 107 companies (total assets $2.3B, net assets $1.1B), with unfunded commitments of $287M, total liquidity of $588.4M (cash $43.4M, undrawn debt $545M), debt outstanding $1.13B and a debt-to-equity ratio of 1.02x (target range 1.0–1.25x) that management intends to gradually optimize. Key portfolio/credit metrics cited: weighted average yield ~10.3% (down from 10.6%), 93% first‑lien senior secured, 95.7% floating rate, weighted average borrower leverage ~4.5x (new originations historically 3.8–4.2x), interest coverage 2.4x, loan‑to‑enterprise value ~43%, weighted average EBITDA $52.7M, nonaccruals 1.4%, Q4 PIK = 7.4% of interest income (3.9% FY). Q4 activity included ~$113M committed, $99.3M funded ($72.3M new, $27M follow‑on), $131.7M repayments, $19.8M BSL sales and net funded activity down $52.2M; new floating‑rate loan spreads averaged 529 bps over SOFR (593 bps incl. one opportunistic investment), management reduced its largest facility to SOFR+195 (from +215) and highlighted that expected spread widening should create accretive origination opportunities.Kayne Anderson BDC, Inc. Financial Statement Overview
Summary
Strong growth/profitability history through 2024, but 2025 introduces major uncertainty: income statement profitability lines are reported as zero and operating/free cash flow turned materially negative (~-$98.7M). Balance sheet looks solid on equity backing, yet the latest-period earnings/cash volatility reduces confidence in current fundamentals.Income Statement
Revenue growth has been very strong over the past several years (2022–2024), and profitability in 2021–2024 was exceptionally high with very strong net margins. However, the 2025 annual report shows revenue up sharply but profitability metrics (gross profit, EBIT/EBITDA, net income and margins) reported as zero, creating a major year-over-year break in earnings quality/visibility and pulling down confidence in the latest-period income statement profile.72
Positive
Balance Sheet
The balance sheet shows solid equity backing (equity of ~$1.11B–$1.19B on ~$2.08B–$2.29B assets in 2024–2025). Leverage improved meaningfully in 2025 with total debt reported at zero versus a moderate debt load in 2024 (debt-to-equity ~0.71) and higher leverage in 2022–2023 (near ~1.0). The key drawback is that 2025 returns are reported as zero, which limits the ability to judge current profitability against the equity base.66
Positive
Cash Flow
Cash generation was strong and consistent from 2021–2024, with operating cash flow positive each year and comfortably exceeding net income (roughly 2.1x–3.7x), and free cash flow matching operating cash flow. In 2025, operating and free cash flow swung sharply negative (about -$98.7M) and free cash flow growth dropped steeply, signaling a material deterioration in cash earnings and raising concerns about near-term funding needs despite prior strength.49
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 235.82M | 181.56M | 132.40M | 68.57M | 28.76M |
| Gross Profit | 198.78M | 123.76M | 82.78M | 50.40M | 24.56M |
| EBITDA | 171.72M | 132.66M | 77.08M | 45.77M | 22.29M |
| Net Income | 93.71M | 131.94M | 77.08M | 45.77M | 22.29M |
Balance Sheet | |||||
| Total Assets | 2.29B | 2.08B | 1.42B | 1.19B | 586.46M |
| Cash, Cash Equivalents and Short-Term Investments | 18.03M | 22.38M | 46.87M | 8.53M | 2.04M |
| Total Debt | 1.12B | 848.13M | 689.32M | 571.59M | 266.33M |
| Total Liabilities | 1.18B | 896.32M | 740.61M | 602.35M | 274.50M |
| Stockholders Equity | 1.11B | 1.19B | 683.06M | 592.04M | 311.97M |
Cash Flow | |||||
| Free Cash Flow | -98.72M | 105.03M | 79.85M | 46.11M | 9.47M |
| Operating Cash Flow | -98.72M | 105.03M | 79.85M | 46.11M | 9.47M |
| Investing Cash Flow | -180.56M | -649.53M | -189.91M | -587.88M | -568.61M |
| Financing Cash Flow | 94.37M | 532.81M | 135.60M | 548.26M | 561.16M |
Kayne Anderson BDC, Inc. Technical Analysis
Negative
13.63
Price Trends
14.09
Negative
14.47
Negative
14.53
Negative
Market Momentum
-0.07
Negative
43.55
Neutral
58.63
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KBDC, the sentiment is Negative. The current price of 13.63 is below the 20-day moving average (MA) of 13.78, below the 50-day MA of 14.09, and below the 200-day MA of 14.53, indicating a bearish trend. The MACD of -0.07 indicates Negative momentum. The RSI at 43.55 is Neutral, neither overbought nor oversold. The STOCH value of 58.63 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for KBDC.
Kayne Anderson BDC, Inc. Risk Analysis
Kayne Anderson BDC, Inc. disclosed 61 risk factors in its most recent earnings report. Kayne Anderson BDC, Inc. reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Kayne Anderson BDC, Inc. Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $221.59M | ― | 0.03% | 13.03% | 315.14% | 116.85% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
67 Neutral | ― | 11.45 | 8.18% | 13.00% | 22.72% | -28.92% | |
64 Neutral | $3.25B | 13.71 | 8.30% | 11.70% | 24.12% | 1.09% | |
59 Neutral | $295.14M | 10.64 | 5.42% | 16.61% | -3.09% | 200.66% | |
53 Neutral | $296.00M | -5.23 | -12.44% | 21.13% | -91.81% | 78.46% | |
52 Neutral | $198.81M | 5.35 | 14.02% | 17.28% | 206.13% | 298.86% |
* Financial Sector Average
KBDC
Kayne Anderson BDC, Inc.
13.63
-1.65
-10.80%
GBDC
Golub Capital Bdc
12.35
-1.27
-9.35%
PNNT
Pennantpark Investment
4.52
-1.57
-25.83%
TCPC
BlackRock TCP Capital
3.51
-3.11
-46.95%
TPVG
TriplePoint Venture Growth
4.91
-1.16
-19.08%
LIEN
Chicago Atlantic BDC
9.71
-0.66
-6.36%
Kayne Anderson BDC, Inc. Corporate Events
Business Operations and StrategyDividendsFinancial Disclosures
Kayne Anderson BDC Announces Q4 Results and 2026 Dividend
Positive
Mar 2, 2026
Kayne Anderson BDC, Inc. reported fourth-quarter 2025 net investment income of $30.1 million, or $0.44 per share, as total investment income edged up to $61.9 million on a rotation from lower-yield broadly syndicated loans into higher-yield middle market loans. Net asset value slipped slightly to $16.32 per share, pressured by $7.8 million in realized and unrealized losses, while non-accruals remained stable at 1.4% of debt investments.
The board declared a regular first-quarter 2026 dividend of $0.40 per share, payable on April 16, 2026 to shareholders of record on March 31, 2026, supported by a portfolio that is more than 95% floating-rate and primarily first-lien debt. Management highlighted strong spread premiums, conservative leverage on borrowers and low software exposure as key differentiators that it believes will underpin dividend stability and portfolio resilience amid ongoing market volatility.
The most recent analyst rating on (KBDC) stock is a Buy with a $17.00 price target. To see the full list of analyst forecasts on Kayne Anderson BDC, Inc. stock, see the KBDC Stock Forecast page.
Financial Disclosures
Kayne Anderson BDC Schedules Upcoming Q4 2025 Earnings Release
Neutral
Jan 15, 2026
On January 15, 2026, Kayne Anderson BDC, Inc. announced that it will release its financial results for the fourth quarter ended December 31, 2025 after U.S. markets close on March 2, 2026, and will discuss the figures on an earnings conference call scheduled for the morning of March 3, 2026. The planned release and call underscore the company’s regular financial reporting cadence and provide debt and equity investors in the middle-market credit space an upcoming checkpoint on portfolio performance and income generation trends, with a replay available through March 10, 2026 for stakeholders who cannot attend live.
The most recent analyst rating on (KBDC) stock is a Hold with a $15.50 price target. To see the full list of analyst forecasts on Kayne Anderson BDC, Inc. stock, see the KBDC Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.