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Palmer Square Capital BDC Inc. (PSBD)
NYSE:PSBD
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Palmer Square Capital BDC Inc. (PSBD) AI Stock Analysis

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PSBD

Palmer Square Capital BDC Inc.

(NYSE:PSBD)

Rating:55Neutral
Price Target:
$14.00
â–²(1.16% Upside)
Palmer Square Capital BDC Inc.'s overall stock score reflects significant financial challenges, particularly in cash flow and profitability, which are partially offset by a stable balance sheet and attractive dividend yield. The technical outlook is neutral, and recent earnings call and corporate events provide some positive sentiment, but the financial performance remains a critical concern.
Positive Factors
Investment Strategy
PSBD's unique strategy of investing across the liquid and private markets can generate attractive risk-adjusted returns.
Liquidity
Available liquidity was solid at $200M, with no debt maturities until 2028.
Negative Factors
Credit Losses
Raising equity discount rate 100 bps to reflect volatility of ROE and elevated credit losses.
Dividend Adjustment
Lower base rates plus spread pressure drove PSBD to reduce the quarterly core dividend by 14%.
Financial Performance
Palmer Square Capital BDC lost $0.26/share equating to an ROE of -6.4% as it generated net losses of $21.3M, primarily due to marks driven by spread widening.

Palmer Square Capital BDC Inc. (PSBD) vs. SPDR S&P 500 ETF (SPY)

Palmer Square Capital BDC Inc. Business Overview & Revenue Model

Company DescriptionPalmer Square Capital BDC, Inc. engages in the provision of investment funds. It lends and invests in corporate debt securities of companies. The company was founded in 2019 and is headquartered in Mission Woods, KS.
How the Company Makes MoneyPalmer Square Capital BDC Inc. generates revenue primarily through the interest income received from its lending activities to middle-market companies. The company invests in a diversified portfolio of debt and equity securities, earning returns through interest payments on loans and potential capital appreciation from equity investments. Additionally, PSBD may generate income through fees associated with the origination and structuring of loans. Key revenue streams include interest income, dividend income from equity holdings, and fees from advisory and management services. Significant factors contributing to its earnings include the creditworthiness of portfolio companies, prevailing interest rates, and effective portfolio management strategies. The company may also engage in strategic partnerships with other financial institutions to enhance its investment capabilities and broaden its market reach.

Palmer Square Capital BDC Inc. Earnings Call Summary

Earnings Call Date:Aug 06, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Nov 11, 2025
Earnings Call Sentiment Neutral
The earnings call highlights strong capital deployment and an attractive yield relative to market benchmarks, with a diversified and high-quality portfolio. However, challenges such as a decrease in total investment income and portfolio fair value, along with ongoing net realized and unrealized losses, are notable. Despite these challenges, the strategic positioning and potential growth in European investments provide a positive outlook.
Q2-2025 Updates
Positive Updates
Strong Capital Deployment and Income Generation
Deployed $92.4 million of capital and generated total and net investment income of $31.7 million and $13.8 million, respectively. Delivered net investment income of $0.43 per share and paid a $0.42 per share second quarter total dividend.
Attractive Yield Relative to Market
PSBD was yielding 12.12% as of the end of July, significantly higher than the leveraged loan index yielding 7.97%, the high-yield index yielding 7.08%, and the 10-year treasury yielding 4.37%.
Portfolio Diversification and High Credit Quality
Total investment portfolio had a fair value of $1.28 billion across 39 industries. Portfolio is 96% senior secured with an average hold size of approximately $5.1 million. Nonaccruals declined during the quarter, representing just 0.19% of the portfolio at fair value.
European Investments as a Source of Value
New loans sourced from European investment team totaled 18% of overall new investments, highlighting strength in accessing high-quality investment opportunities.
Negative Updates
Decrease in Total Investment Income
Total investment income was $31.7 million, down 13.3% from $36.5 million for the comparable prior year period, attributed primarily to rate cuts affecting floating rate loans.
Decrease in Portfolio Fair Value
Fair value of the total investment portfolio decreased approximately 4% from $1.33 billion at the end of the first quarter of 2025 to $1.28 billion at the end of the second quarter.
Net Realized and Unrealized Losses
Total net realized and unrealized losses of $6.7 million, including net unrealized depreciation of $13.3 million relating to existing portfolio investments.
Company Guidance
During Palmer Square Capital BDC's Second Quarter 2025 Earnings Call, the company reported several key financial metrics and strategic highlights. The team deployed $92.4 million of capital and generated total and net investment income of $31.7 million and $13.8 million, respectively. They delivered net investment income of $0.43 per share and paid a $0.42 per share dividend, including a $0.06 supplemental distribution. The net asset value (NAV) per share was reported at $15.68, slightly down from the previous quarter. The portfolio yielded 12.12% as of July, compared to other benchmarks like the leveraged loan index at 7.97% and the high-yield index at 7.08%. The firm's total investment portfolio had a fair value of approximately $1.28 billion and was diversified across 39 industries. The debt-to-equity ratio stood at 1.51x, with total net assets of $505.2 million. The BDC's strategy focuses on senior secured liquid credit and opportunistic private credit investments, leveraging its global platform to access high-quality opportunities.

Palmer Square Capital BDC Inc. Financial Statement Overview

Summary
Palmer Square Capital BDC Inc. faces significant challenges with inconsistent revenue and profitability, potentially due to market volatility or operational inefficiencies. The balance sheet remains relatively stable with no debt, reducing financial risk, but changes in stockholders' equity and assets suggest some instability. Negative cash flows are a critical concern, indicating potential liquidity issues. The company must focus on stabilizing revenues and improving operational efficiency to enhance its financial position.
Income Statement
42
Neutral
Palmer Square Capital BDC Inc. has experienced significant volatility in its revenue and profitability. The company showed a negative revenue growth rate from the previous year, indicating a challenging environment. The gross profit margin is stable, but the net profit margin is inconsistent, highlighting volatility in core operations. EBIT and EBITDA margins have been highly negative, which could indicate operational inefficiencies or restructuring costs.
Balance Sheet
55
Neutral
The balance sheet shows a moderate equity ratio, suggesting a balanced capital structure with a manageable level of leverage. The company has eliminated its total debt, significantly reducing financial risk. However, fluctuations in stockholders' equity and total assets over the years highlight potential instability. The return on equity is positive, reflecting some efficiency in generating profits from shareholders' investments.
Cash Flow
37
Negative
The cash flow statement indicates a challenging situation with a significant decline in operating cash flow. Free cash flow has also turned negative, raising concerns about the company's ability to generate cash internally. The operating cash flow to net income ratio is negative, reflecting inefficiencies in converting income into cash. The company has relied on financing to support cash flow, which might not be sustainable in the long term.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue114.76M110.32M109.18M-72.84M20.92M24.45M
Gross Profit74.63M52.31M101.82M-81.99M13.52M19.49M
EBITDA80.77M47.67M152.32M0.0027.68M31.47M
Net Income39.56M47.67M107.84M-74.48M19.06M26.73M
Balance Sheet
Total Assets1.31T1.43B1.12B1.06B1.22B667.49M
Cash, Cash Equivalents and Short-Term Investments16.44B2.77M65.88M1.65M1.09M682.58K
Total Debt0.00804.16M641.83M641.31M649.91M393.15M
Total Liabilities809.60B893.20M659.86M694.01M764.49M414.35M
Stockholders Equity505.21B537.85M461.96M363.44M452.80M253.14M
Cash Flow
Free Cash Flow46.41B-200.60M57.12M25.11M-438.01M16.19M
Operating Cash Flow46.41B-200.60M57.12M25.11M-438.01M16.19M
Investing Cash Flow97.55M-305.05M-26.65M35.40M-519.55M-586.26M
Financing Cash Flow-97.76M201.25M-30.00M-24.56M438.42M570.75M

Palmer Square Capital BDC Inc. Technical Analysis

Technical Analysis Sentiment
Negative
Last Price13.84
Price Trends
50DMA
13.97
Negative
100DMA
13.54
Positive
200DMA
13.94
Negative
Market Momentum
MACD
<0.01
Positive
RSI
47.11
Neutral
STOCH
21.39
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PSBD, the sentiment is Negative. The current price of 13.84 is below the 20-day moving average (MA) of 13.94, below the 50-day MA of 13.97, and below the 200-day MA of 13.94, indicating a bearish trend. The MACD of <0.01 indicates Positive momentum. The RSI at 47.11 is Neutral, neither overbought nor oversold. The STOCH value of 21.39 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PSBD.

Palmer Square Capital BDC Inc. Peers Comparison

Overall Rating
UnderperformOutperform
Sector (55)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
71
Outperform
$538.89M6.5116.54%10.61%33.75%6.20%
68
Neutral
$359.54M10.349.27%13.43%-1.64%104.07%
64
Neutral
$418.85M10.1110.88%10.85%65.75%14.28%
58
Neutral
$537.01M15.47-1.27%14.58%-11.83%-108.11%
55
Neutral
$451.37M25.023.46%12.74%0.36%-80.23%
55
Neutral
$6.29B4.61-20.95%6.01%10.84%8.15%
48
Neutral
$468.83M33.352.89%13.26%-35.46%-67.15%
* General Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
PSBD
Palmer Square Capital BDC Inc.
13.84
-0.75
-5.14%
GAIN
Gladstone Investment
14.14
3.42
31.90%
PNNT
Pennantpark Investment
7.24
1.21
20.07%
SAR
Saratoga Investment
24.79
4.32
21.10%
SCM
Stellus Capital
14.74
2.56
21.02%
CION
CION Investment Corp
10.31
0.23
2.28%

Palmer Square Capital BDC Inc. Corporate Events

Business Operations and Strategy
Palmer Square Capital BDC to Present Investment Strategies
Positive
Sep 3, 2025

On September 4, 2025, Palmer Square Capital BDC Inc. will present at its investor forum, showcasing its differentiated platform and investment strategies. The company emphasizes its ability to identify attractive investment opportunities and manage risks effectively, which is crucial given the current economic uncertainties and geopolitical tensions. The presentation will highlight the firm’s strong performance in the CLO market and its strategic focus on maintaining liquidity and minimizing interest rate duration, aiming to deliver returns that exceed yield expectations.

Financial Disclosures
Palmer Square Capital BDC Reports July NAV Estimate
Neutral
Aug 18, 2025

Palmer Square Capital BDC Inc. announced that the unaudited estimate of its net asset value per share of common stock was $15.93 as of July 31, 2025. This valuation provides stakeholders with insight into the company’s financial standing at that date, potentially impacting investor perceptions and market positioning.

DividendsBusiness Operations and StrategyFinancial Disclosures
Palmer Square Capital BDC Reports Q2 2025 Financial Results
Neutral
Aug 6, 2025

On August 6, 2025, Palmer Square Capital BDC Inc. announced its financial results for the second quarter of 2025, reporting a total investment income of $31.7 million, a decrease from the previous year. The company declared a third quarter base dividend of $0.36 per share, with a supplemental dividend expected in September. Despite a volatile macroeconomic environment, the company maintained a strong performance, leveraging its $35-billion platform to access primary and secondary markets for loans. The announcement reflects the company’s strategic focus on credit markets, aiming to deliver attractive returns for shareholders.

Financial Disclosures
Palmer Square Capital BDC Announces June NAV Estimate
Neutral
Jul 15, 2025

Palmer Square Capital BDC Inc. announced that the unaudited estimate of its net asset value per share of common stock was $15.68 as of June 30, 2025. This valuation provides stakeholders with insight into the company’s financial standing at that time, reflecting its market position and potential implications for future performance.

DividendsFinancial Disclosures
Palmer Square Capital Announces Supplemental Dividend
Positive
Jun 23, 2025

On June 23, 2025, Palmer Square Capital BDC Inc. announced a supplemental dividend of $0.06 per share for the second quarter of 2025, payable on July 14, 2025, to shareholders of record as of June 27, 2025. This dividend, derived from the company’s excess quarterly undistributed net investment income, is in addition to the previously declared base dividend of $0.36 per share, reflecting Palmer Square’s strong financial performance and commitment to delivering value to its shareholders.

Financial Disclosures
Palmer Square Capital BDC Inc. Updates Net Asset Value
Neutral
Jun 13, 2025

Palmer Square Capital BDC Inc. announced that the unaudited estimate of its net asset value per share of common stock was $16.03 as of May 31, 2025. This financial update provides stakeholders with a snapshot of the company’s valuation, which can influence investor perception and market positioning.

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.Date of analysis: Sep 05, 2025