GBDC vs PSEC: Which BDC is the Better Dividend Buy?
A side-by-side comparison of Golub Capital BDC, Inc. (GBDC) and Prospect Capital Corporation (PSEC) — dividend yield, NAV premium/discount, market cap, and price-to-NAV valuation.
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GBDC vs PSEC: Key Metrics Head-to-Head
| Metric | GBDC | PSEC | Edge |
|---|---|---|---|
| Dividend Yield | 11.03% | 23.11% | PSEC |
| Premium / Discount to NAV | -14.08% | -67.15% | GBDC |
| Market Capitalization | $3.2B | $2.1B | GBDC |
| Trailing Stock Price | $13.06 | $2.25 | — |
| Net Asset Value (NAV) | $15.2 | $6.85 | — |
| Price vs NAV (Valuation) | Discount | Discount | GBDC |
| Dividend Frequency | Quarterly | Monthly | — |
| Leverage Ratio | 1.2x | 0.95x | PSEC |
About GBDC — Golub Capital BDC, Inc.
Golub Capital BDC is a middle-market lending BDC that focuses primarily on first lien senior secured loans. GBDC is externally managed by Golub Capital, a seasoned middle-market credit manager with over $60 billion in capital under management. The company targets companies with EBITDA between $5 million and $50 million and emphasizes strong underwriting standards and portfolio diversification.
About PSEC — Prospect Capital Corporation
Prospect Capital Corporation is one of the oldest publicly traded BDCs, having operated since 2004. PSEC is known for its monthly dividend payments and a diversified investment strategy that spans senior secured loans, mezzanine debt, and equity investments. The company focuses on companies with stable cash flows and tangible asset bases. PSEC has a notable track record of consistent monthly distributions.
How to Choose Between GBDC and PSEC
When comparing two Business Development Companies, the right choice depends on your income objective:
- Dividend yield matters most for immediate income — the higher yielder wins on cash flow, but make sure it's covered by investment income.
- NAV premium/discount matters for valuation — a discount to NAV implies you're buying assets below their accounting value, a premium implies the market expects above-average growth.
- Market cap reflects liquidity and scale — larger BDCs typically have lower borrowing costs and better portfolio diversification.
- Leverage cuts both ways — it amplifies dividend yield but increases sensitivity to credit defaults and interest rate moves.
Both GBDC and PSEC are Regulated Investment Company (RIC)-structured BDCs required to distribute at least 90% of taxable income to shareholders, which is what produces their above-average dividend yields. Use the comparison table above as a starting point, then read each full profile before making an investment decision.
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Not Investment Advice: This comparison is for educational and informational purposes only. Nothing here constitutes a recommendation, solicitation, or investment advice to buy or sell any security. Past performance does not guarantee future results. Always conduct your own due diligence and consult a licensed financial advisor. Read our full Editorial Policy and Terms of Service.