Sixth Street Specialty Lending (TSLX) Stock Overview
Sixth Street Specialty Lending, Inc. (NYSE: TSLX) is a business development company. More details
| Snowflake Score | |
|---|---|
| Valuation | 2/6 |
| Future Growth | 3/6 |
| Past Performance | 0/6 |
| Financial Health | 1/6 |
| Dividends | 4/6 |
TSLX Community Fair Values
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Analyst Price Targets
Sixth Street Specialty Lending, Inc. Competitors
Price History & Performance
| Historical stock prices | |
|---|---|
| Current Share Price | US$16.89 |
| 52 Week High | US$25.17 |
| 52 Week Low | US$16.04 |
| Beta | 0.64 |
| 1 Month Change | -1.97% |
| 3 Month Change | -5.70% |
| 1 Year Change | -28.94% |
| 3 Year Change | -9.63% |
| 5 Year Change | -25.66% |
| Change since IPO | 5.56% |
Recent News & Updates
Narrative Update • Jun 26
TSLX: Dividend Reset And Sector Repricing Will Shape Forward Return Potential
The analyst price target for Sixth Street Specialty Lending has been reduced from about $23.75 to roughly $19.80, with analysts citing refreshed estimates and a broader recalibration of business development company valuations following recent quarterly updates. Analyst Commentary Recent research on Sixth Street Specialty Lending shows a mix of optimism about the company’s execution and caution around sector-wide business development company repricing, with several firms trimming their targets into a tighter band around the high teens.Seeking Alpha • May 20
Sixth Street Specialty Lending: Disappointed But Holding On
Summary Sixth Street Specialty Lending (TSLX) remains a HOLD as Q1-26 results revealed negative clarity: NII missed, dividend was cut, and NAV fell sharply. TSLX's valuation is split—P/NII is historically expensive while P/NAV is historically cheap—reflecting market belief in both income and book value recovery. Portfolio quality concerns persist as Grade 2 watch-list loans rose to 9.4%, but non-accruals improved and leverage remains within target range. The new $0.42 dividend is right-sized to current earnings, with $1.15/share spillover providing a buffer, but further trims may be needed if NII recovery stalls. Read the full article on Seeking AlphaRecent updates
Narrative Update • Jun 26
TSLX: Dividend Reset And Sector Repricing Will Shape Forward Return Potential
The analyst price target for Sixth Street Specialty Lending has been reduced from about $23.75 to roughly $19.80, with analysts citing refreshed estimates and a broader recalibration of business development company valuations following recent quarterly updates. Analyst Commentary Recent research on Sixth Street Specialty Lending shows a mix of optimism about the company’s execution and caution around sector-wide business development company repricing, with several firms trimming their targets into a tighter band around the high teens.Seeking Alpha • May 20
Sixth Street Specialty Lending: Disappointed But Holding On
Summary Sixth Street Specialty Lending (TSLX) remains a HOLD as Q1-26 results revealed negative clarity: NII missed, dividend was cut, and NAV fell sharply. TSLX's valuation is split—P/NII is historically expensive while P/NAV is historically cheap—reflecting market belief in both income and book value recovery. Portfolio quality concerns persist as Grade 2 watch-list loans rose to 9.4%, but non-accruals improved and leverage remains within target range. The new $0.42 dividend is right-sized to current earnings, with $1.15/share spillover providing a buffer, but further trims may be needed if NII recovery stalls. Read the full article on Seeking AlphaSeeking Alpha • Apr 21
Sixth Street Specialty Lending: A Quality Dividend Powerhouse For Long-Term Investors
Summary Sixth Street Specialty Lending provides investors with a 10% dividend yield and low volatility, which makes it suitable for defensive income-focused portfolios that require stable cash flows. The company maintains stable stock performance, solid financials and prudent leverage which supports its ability to continue dividend payments even though it trades at a premium to NAV. The recent price pullback presents an attractive entry point, with potential gains of nearly 18% and a solid risk/reward balance. The company delivers superior total returns than its sector peers, which supports its strong shareholder base and investor interest. Read the full article on Seeking AlphaSeeking Alpha • Mar 13
Sixth Street Specialty Lending: Improved Fundamentals But Expensive
Summary TSLX offers a high dividend yield of 9.2%, supported by strong earnings and supplemental distributions, making it attractive for reliable income seekers. The portfolio is well-diversified with 94% in first lien senior secured debt, reducing risk and ensuring high repayment priority. Non-accrual rates have improved to 1.4%, indicating better portfolio quality compared to peers and strong management underwriting. Despite a premium valuation of 28.7% above NAV, TSLX's consistent performance and solid financials justify holding the stock for long-term income. Read the full article on Seeking AlphaSeeking Alpha • Feb 15
Sixth Street Specialty Lending: I Like The Quality, But Not At 31% Premium
Summary Sixth Street Specialty Lending has delivered positive Q4 results, and the market seems to like it. TSLX now trades at P/NAV of 1.31x, making it the most expensive non-equity focused BDC. While the quality remains robust and the adjusted NII per share guidance is positive, I have several concerns here. In this article, I explain in more detail why I have not assigned a buy rating even though, in my view, TSLX is one of the highest quality BDCs out there. Read the full article on Seeking AlphaSeeking Alpha • Feb 03
Sixth Street Specialty Lending: Strong Liquidity Enables Navigation Of Lower Interest Rates
Summary Sixth Street Specialty Lending has shown strong performance in a high interest rate environment and is well-positioned for potential lower rates. Despite a flat share price, TSLX's solid portfolio and strong dividend coverage make it a good buy on market pullbacks. The latest quarter saw TSLX beat total investment income estimates, although net investment income slightly declined from previous quarters. With a high-quality portfolio and strong financials, TSLX is likely to offset the impact of declining interest rates effectively. Read the full article on Seeking AlphaSeeking Alpha • Jan 10
Sixth Street Specialty Lending: Lower Interest Rates Won't Hurt Its Income Potential
Summary Sixth Street Specialty Lending is well-positioned to thrive in a decreasing interest rate environment while maintaining solid dividend coverage. TSLX's defensive portfolio features first-lien debt orientation, effective voting control on 78% of debt investments, and reasonable non-accruals at 1.9%. Despite interest rate cuts, TSLX's dividend coverage remains robust, with a margin of safety of 107% even with further 200 bps cuts. Trading at a 23% premium to NAV, TSLX offers attractive income potential and limited downside risk, with Wall Street expecting a 5.6% stock price appreciation. Read the full article on Seeking AlphaSeeking Alpha • Nov 17
Sixth Street Specialty Lending: Underwhelming Performance And Rising Non-Accruals (Rating Downgrade)
Summary I am downgrading Sixth Street Specialty Lending stock to a hold due to its continued underperformance against peers and unjustified premium valuation. Despite a high 10.3% dividend yield and consistent dividend history, TSLX's total return is lackluster, only achieving a 1% YTD return. The non-accrual rate has increased to 1.9%, indicating rising vulnerability in the current high-interest rate environment. TSLX trades at an 18.34% premium to NAV, but I believe the price could decline further as interest rates continue to be reduced and negatively affect net investment income. Read the full article on Seeking AlphaSeeking Alpha • Nov 10
Sixth Street Specialty Lending: 10% Yield Is Getting Less Sustainable
Summary TSLX offers a 10% dividend yield with strong fundamentals, but recent performance has lagged, delivering a YTD total return of just 1.4%. Q3 2024 results show a slight decline in net investment income and NAV, with distribution coverage at 109%, raising concerns about dividend sustainability. Portfolio quality remains strong, but yield compression and potential base rate cuts could pressure net investment income, necessitating aggressive M&A activity. Despite solid fundamentals, the thin margin of safety prompts a downgrade to hold due to concerns over future dividend sustainability. Read the full article on Seeking AlphaSeeking Alpha • Oct 15
Sixth Street Specialty Lending: How's Dividend After Interest Rate Cut
Summary Sixth Street Specialty Lending is a defensive BDC with strong base dividend coverage, even amid potential interest rate cuts. TSLX's portfolio is well-diversified, focusing on first-lien debt, with low non-accruals and reasonable industry exposure. Despite interest rate cuts, TSLX's dividend coverage remains robust, with room for special dividends. TSLX trades at a premium to NAV, reflecting its quality, but I expect more attractive entry points in the upcoming quarters. Read the full article on Seeking AlphaSeeking Alpha • Sep 05
Sixth Street Specialty Lending: A 10% BDC Yield For A Recession
Summary Sixth Street Specialty Lending's net funded investment activity declined in 2Q24 due to higher repayments, but it comfortably out-earned its dividend with a 10% yield. The BDC maintains a diversified, high-quality First Lien-focused portfolio with low exposure to cyclical investments, making it a relatively secure investment. Despite a 23% premium to NAV, Sixth Street Specialty Lending's consistent dividend coverage and solid credit profile support a 'Hold' rating. Risks include potential challenges from lower short-term interest rates, but dividend sustainability and low non-accrual ratios mitigate concerns. Read the full article on Seeking AlphaSeeking Alpha • Aug 22
Sixth Street Specialty Lending: Good Way To Play Defense In BDC Sector
Summary I have been bullish on TSLX since early January this year, making the case for protected dividend income. While the price performance has been negative, the dividends have continued to come in, balancing the total return profile. Assessing the Q2, 2024 data, we can see that the thesis of TSLX being a defensive dividend pick is still there. In this article, I explain why I remain bullish on TSLX after the Q2 results. Read the full article on Seeking AlphaSeeking Alpha • Aug 15
Sixth Street Specialty Lending: Defensive BDC To Buy When Volatility Hits
Summary Sixth Street Specialty Lending is a BDC investing in US middle-market companies with enterprise values of $50m to $1B and EBITDA of $10m to $250m. TSLX has a defensive investment approach with a diversified portfolio, first-lien debt focus, and reasonable non-accruals. Investors should expect increased stock price volatility and higher non-accruals in the upcoming quarters. That should lead to better entry levels with a lower premium to TSLX's net asset value. Therefore, it is a 'hold' for me. Read the full article on Seeking AlphaSeeking Alpha • Jul 16
Sixth Street Specialty Lending: An 8.7% Dividend Worth Considering
Summary Given the prospect of falling interest rates, investors may turn to high yield investments like BDCs, with dividend yields in the 8-10% range. Sixth Street Specialty Lending Inc. is analyzed in 6 key areas for investment potential in the BDC sector. There is fee structure alignment with shareholders, almost all investments are first lien, and TSLX has proven to preserve net asset value over time. The cost of leverage is based on floating rates, and the asset portfolio is heavily tilted towards non-cyclical industries and is strongly diversified. Balance sheet leverage should be monitored, as recently, there has been slight evidence of reaching for more leverage. Read the full article on Seeking AlphaSeeking Alpha • Jul 05
Sixth Street Specialty Lending: Consistent Performance Justifies Premium
Summary TSLX is a BDC focusing on lending to middle market US companies. The portfolio is well-constructed, diverse, and focused on risk mitigation through first lien debt investments and a majority of investments on a floating rate basis. TSLX's high distribution rate of 8.8% is well-supported by net investment income, with a history of solid dividend growth and coverage, making it an attractive option for income-focused investors. The price currently trades at a premium to NAV but is justified by strong portfolio quality that remains cyclical resistant. Non-accruals have slightly increased to 1.1% of fair value. Read the full article on Seeking AlphaSeeking Alpha • Jun 22
Sixth Street Lending: You Can Get A 9% Yield, But The Stock Is No Bargain
Summary Sixth Street Lending Inc. is a well-managed BDC with a First Lien-centric, floating-rate investment portfolio and a 9% dividend yield. The central bank's guidance for a higher-for-longer rate environment may aid short-term growth, but long-term net investment income growth is uncertain. TSLX's 24% premium to NAV may not offer compelling risk/reward, especially in an environment of falling interest rates. Read the full article on Seeking AlphaSeeking Alpha • Jun 02
Sixth Street Specialty Lending: A Top Notch BDC To Buy On A Pullback
Summary Sixth Street Specialty Lending has shown strong performance during the challenging economic backdrop, resulting in the BDC trading well above its NAV. The BDC has a high-quality portfolio with strong fundamentals and stable earnings, growing their Nll, Tll, and total investments year-over-year. The company has strong dividend coverage and a solid investment grade balance sheet with well-laddered debt maturities and ample liquidity. But with interest rates likely to drop in the near to medium term, I suspect TSLX's share price to decline as a result of its 100% floating rate debt portfolio. Management also anticipates Nll to decline as interest rates fall, which will likely lead to them eliminating the supplemental dividend. Read the full article on Seeking AlphaSeeking Alpha • May 13
Sixth Street Continues Thriving, Proving To Be A Solid Long-Term Dividend Investment
Summary Sixth Street Specialty Lending has implemented an impressive portfolio strategy, generating solid risk-adjusted returns and maintaining a low non-accrual rate. As BDC market trends are improving, Sixth Street's healthy liquidity position increases its potential to capitalize on attractive opportunities. It could be a solid option for cash-hungry investors with a long-term investment horizon. Read the full article on Seeking AlphaSeeking Alpha • Mar 18
Sixth Street Specialty Lending: Still Thriving Despite The Headwinds
Summary Sixth Street Specialty Lending, Inc. is one of the largest BDCs with a NAV of close to $1.5 billion. TSLX has consistently outperformed the broader BDC market over the past 5 years, and due to the strength of its fundamentals, it trades at a premium to NAV. If we reconcile the Q4 2023 earnings report, we will understand that having a premium here is fully justified. In this article, I outline the key reasons why TSLX continues to be a clear buy despite the headwinds at the industry level. Read the full article on Seeking AlphaSeeking Alpha • Feb 21
Sixth Street Lending Q4: Smooth Sailing For This 10% Yielding BDC
Summary Sixth Street Lending focuses on First Lien debt origination and had a strong fourth quarter with high net investment fundings. The stock is currently overvalued based on net asset value, leading to a Hold rating. The company provides a safe 10% yield, but there are better yield choices and the floating-rate focus is no longer a good reason to invest. Read the full article on Seeking AlphaSeeking Alpha • Feb 10
Sixth Street Specialty Lending: Trades At A Premium To Nav Due To High Quality
Summary This BDC offers a high dividend yield of 8.6% that is well-covered by NII (net investment income). A raise is likely to be announced soon. TSLX outperformed the VanEck BDC Income ETF and the S&P 500 in total return over the last ten years. TSLX's portfolio is diversified across multiple sectors and primarily focuses on financing middle-market companies in the US. Shares currently trade at a premium to NAV, but this is likely due to the consistent performance and strong cash flow. Read the full article on Seeking AlphaSeeking Alpha • Jan 26
Sixth Street Specialty Lending: 8% Yield And NAV/Share Growth
Summary Sixth Street Specialty Lending is a BDC that benefits from economic growth and higher interest rates while offering an attractive yield. TSLX has a solid track record of NAV preservation and growth, and has given investors a 273% total return over the past 10 years. The company maintains a prudent investment strategy, with 91% of its portfolio in first lien senior secured debt and has good portfolio diversification. Read the full article on Seeking AlphaSeeking Alpha • Jan 08
Switching Walk From Main Street Capital To Sixth Street Specialty Lending
Summary Sixth Street Specialty Lending and Main Street Capital are two of the largest BDCs in terms of NAV value and trade at a premium to the BDC sector. The notion of valuation premium is fully justified given the defensive characteristics of the underlying portfolios, excellent dividend coverage, and size advantage. While both BDCs are attractive, there are several aspects, which render TSLX a better choice. In this article, I compare these two names side by side, focusing on the key areas of difference. Read the full article on Seeking AlphaSeeking Alpha • Dec 15
Sixth Street Specialty Lending: A Top BDC Selling At A Fair Price (Rating Downgrade)
Summary Sixth Street Lending's stock price has risen 20% in 2023, leading to a classification change to Hold. The company has a well-managed portfolio and a dividend that is well-covered by adjusted net investment income. However, the stock has a high NAV multiple and passive income investors receive a lower dividend yield compared to the yield on its debt investments. Read the full article on Seeking AlphaSeeking Alpha • Nov 17
Sixth Street Specialty Lending: Outperforming, Strong Earnings
Summary TSLX has outperformed the BDC industry and the S&P 500 in 2023, with an 18.6% increase in its price. Unlike many other BDC's, TSLX has positive Realized Gains in 2023. TSLX yields 10% with strong dividend coverage. Read the full article on Seeking AlphaSeeking Alpha • Oct 13
Sixth Street Specialty Lending: The 9.2% Yield Is One To Hold
Summary Sixth Street Specialty Lending is currently paying out a 9.2% base dividend yield. The BDC is currently swapping hands for a 19% premium to NAV per share. NAV is set to grow further on the back of net investment income spillover and a dividend that is 113% covered. Read the full article on Seeking AlphaSeeking Alpha • Sep 04
Sixth Street Specialty Lending: Best Of Breed In BDC Space
Summary Sixth Street Specialty Lending is a BDC that provides financing options to small and medium-sized US enterprises. TSLX's conservative capital allocation policy has resulted in underperformance compared to peers, but this creates an attractive entry point. TSLX has minimal idiosyncratic exposures, a prudent funding approach, and offers juicy cash flows, making it a solid investment. Read the full article on Seeking AlphaSeeking Alpha • Aug 23
TSLX: The Golden Age Of Private Credit
Summary Two macro trends, one near-term and the other long-term, are pushing borrowers to private lending. Sixth Street and other BDCs are seeing increased demand for loans from the mid-market they service. Sixth Street is pretty choosy in whom they lend to, but now there are far more qualified borrowers. They have raised capital twice since May to fill this demand. Read the full article on Seeking AlphaSeeking Alpha • Jul 28
Sixth Street Specialty Lending: 10% Yield, Strong Q1 Earnings
Summary Sixth Street Specialty Lending yields 9.2% on its regular quarterly distribution, plus 0.8% for its supplemental payout, for a total yield of ~10%. NII jumped 20% in Q1 '23. Strong distribution coverage of 1.22X. Read the full article on Seeking AlphaSeeking Alpha • Jul 21
Sixth Street Specialty Lending: The 9.4% Dividend Yield Is Getting Fatter
Summary Sixth Street Specialty Lending, Inc. is paying out a 9.4% regular dividend yield. This was 119% covered by fiscal 2023 first quarter net investment income. The business development company's spillover income of $0.87 per share is set to power future supplementals through 2023 and 2024. Read the full article on Seeking AlphaSeeking Alpha • Jun 09
Sixth Street Specialty Lending: 9.7% Yield And Investment Grade Credit Rating
Summary Sixth Street Specialty Lending offers an attractive yield and has consistently delivered strong shareholder returns. TSLX has a healthy portfolio, reasonable leverage, and is well-positioned to benefit from volatility in the regional bank sector. The stock is a strong pick for income investors due to its ample room for special dividends, improving debt-to-equity ratio, and attractive valuation. Read the full article on Seeking AlphaSeeking Alpha • May 23
TSLX: Another Quarter Of Outperformance For This 11.2% Yielding BDC
Summary We catch up on Q1 results from BDC Sixth Street Specialty Lending and highlight key income dynamics of the portfolio. TSLX had a very strong quarter with a 4.1% total NAV return. Both net income and the NAV registered gains. The Bed Bath & Beyond loan has been in the news. Despite the company's bankruptcy TSLX expects a full repayment in the near term. We view the recent dip in price due to the public issuance an attractive entry point. Read the full article on Seeking AlphaSeeking Alpha • Feb 24
Sixth Street Specialty Lending goes ex-dividend on Monday
Sixth Street Specialty Lending (NYSE:TSLX) had declared $0.09/share special dividend. Payable March 20; for shareholders of record Feb. 28; ex-div Feb. 27. See TSLX Dividend Scorecard, Yield Chart, & Dividend Growth.Seeking Alpha • Feb 16
Sixth Street Specialty Lending raises base dividend by 2% to $0.46
Sixth Street Specialty Lending (NYSE:TSLX) declares $0.46/share quarterly dividend, 2.2% increase from prior dividend of $0.45. Forward yield 9.7% Payable March 31; for shareholders of record March 15; ex-div March 14. The Board also announced a fourth quarter supplemental dividend of $0.09 per share to shareholders of record as of February 28, 2023, payable on March 20, 2023. See TSLX Dividend Scorecard, Yield Chart, & Dividend Growth.Seeking Alpha • Jan 20
10%-Yielding Sixth Street Specialty Lending Is A Buy
Summary Sixth Street Specialty Lending has a very strong track record of capital returns to shareholders. It has very low non-accruals and high exposure to floating-rate debt instruments, which benefit from elevated interest rates. I also highlight the dividend, balance sheet, valuation, and other important points. BDCs looked as if they were set for a rally this year, but that thinking may have been premature, as many of them have since sold off from their January highs. While this may lead some to seek bargains, it pays to be choosy with high quality in this space. This includes the income favorite, Sixth Street Specialty Lending (TSLX) which as seen below, trades well off its 52-week high of $24. In this article, I highlight why TSLX is a solid buy for income on the recent dip. Why TSLX? Sixth Street Specialty Lending is a BDC that invests in the U.S. middle market space, primarily through senior secured loans, and equity investments in portfolio companies. It targets portfolio companies with $10 to $250 million in annual EBITDA. As shown below, TSLX maintains a well diversified portfolio in mostly defensive industries, including business services, consumer products, internet services, and financial services. TSLX Portfolio Mix (Investor Presentation) Notably, TSLX benefits from its affiliation with its external advisor, Sixth Street, a global investment firm with over $50 billion in assets under management. This robust management platform gives TSLX valuable line of sight and deal sourcing opportunities that it would not otherwise have. Importantly, management at TSLX has done a solid job of growing net asset value per share over the long run. As shown below, while TSLX's NAV/share has seen its ups and downs over the years, its overall trajectory has been up since its IPO in 2014. TSLX NAV/Share (YCharts) At the same, TSLX has rewarded shareholders with a regular dividend that's risen since IPO and has never been cut, plus special dividends along the way. In fact, TSLX has paid $20.06 in cumulative dividends since IPO far surpassing its $14.71 IPO price. This has contributed to market beating returns over the past 5 years. As shown below, TSLX has produced a 64% total return since 2018, far surpassing the 47% and 50% total returns of the VanEck Vectors BDC Income ETF (BIZD) and the S&P 500 (SPY). TSLX Total Return (Seeking Alpha) Good reasons behind TSLX's strong shareholder returns include prudent investment management with 90% of the portfolio being in the form of first-lien secured debt (92% total secured, including second-lien). Importantly, investments on non-accrual represent just 0.01% of the portfolio total, with no new investments added to non-accrual status in the last reported quarter. Management is also actively involved with its direct sourced investments, as it has effective voting control on 89% of debt investments. Moreover, TSLX is benefitting from rising interest rates, as 99% of its investments are floating rate. As shown below, this has contributed to weighted average total yield on debt and income producing securities improving by 200 basis points YoY to 12.2% in the last reported quarter. TSLX Yield On Debt (Investor Presentation) Meanwhile, TSLX maintains a BBB- investment grade rated balance sheet, with a debt to equity ratio of 1.17x, sitting well below the 2.0x statutory limit, and within management's targeted range of 0.9x to 1.23x. Notably, in December, TSLX hiked its regular quarterly dividend for the second time this year to $0.45 (up by $0.03 from $0.42 previously). This remains covered by TSLX's NII per share of $0.47 during the third quarter, and is a positive sign that the fourth quarter's NII per share may come in higher on a sequential basis.Seeking Alpha • Jan 09
Sixth Street: You Can Still Get A 10% Yield On Your Purchase
Summary Sixth Street Specialty Lending, Inc. is a well-managed business development company, or BDC, that passive income investors should have on their radar. The trust has a First Lien focus and has a safer-than-average investment portfolio. Sixth Street Specialty Lending has a record of achieving double-digit annual ROEs. Sixth Street Specialty Lending, Inc. (TSLX) is a high-quality, well-managed business development company ("BDC") that income investors should consider adding to their portfolios. The business development firm specializes in First Liens and has exceptional credit quality. Despite a conservative portfolio, the BDC has consistently produced high returns on equity. Sixth Street Specialty Lending's dividend is fully covered by net investment income, and the stock is currently trading at a 10% premium to net asset value. Portfolio Composition, Double Digit Equity Returns, Credit Quality Sixth Street Specialty Lending is a well-managed business development firm that specializes in high-quality First Lien Debt investments. The BDC invests approximately 90% of its capital in secure first liens with low loss ratios, providing passive income investors with a high level of security. 87% of Sixth Street Specialty Lending's new investments in the third quarter were in secure first liens. The BDC follows a disciplined investment strategy and ensures that its investments are secure in order to protect investors from capital losses. Low Volatility Portfolio (Sixth Street Specialty Lending Inc) Despite its First Lien focus, Sixth Street Specialty Lending has historically produced attractive, double-digit equity returns. The BDC's return on equity (measured as ROE on adjusted net income) was at least 10.8% between 2014 and 2021, and Sixth Street Specialty Lending performed well even when the Covid-19 pandemic impacted portfolio companies and valuations in 2020. Sixth Street Specialty Lending did not achieve a double-digit ROE until 2015. TSLX Annual Returns Since IPO (Sixth Street Specialty Lending Inc) Sixth Street Specialty Lending has significantly less investment risk than the average large business development company because its First Lien percentage is 20 percentage points higher. Sixth Street Specialty Lending achieves high double-digit ROEs while assuming less risk than other business development firms in the sector. Relative Value (Sixth Street Specialty Lending Inc) Sixth Street Specialty Lending reached a record portfolio value (based on fair value) of $2.81 billion in the third quarter, and the BDC has significantly reduced its exposure to volatile business sectors over time. Currently, the BDC has approximately 12% of its investment portfolio invested in cyclical names, including energy exposure. Low Cyclical Exposure (Sixth Street Specialty Lending Inc) Top Portfolio Quality Sixth Street Specialty Lending's portfolio quality is very high, comparable to Oaktree Specialty Lending Corporation (OCSL), which I consider to be the gold standard in the BDC industry. As of September 30, 2022, Sixth Street Specialty Lending had only one non-accrual investment, which represented less than 0.1% of the company's investments based on fair value. The non-accrual ratio has remained low over the last year, attesting to the overall portfolio quality and superior management style of Sixth Street Specialty Lending. % Of Investments On Non-Accrual (Sixth Street Specialty Lending Inc) 10% Premium To Net Asset Value Given Sixth Street Specialty Lending's high portfolio quality and ability to cover its dividend with net investment income (the dividend payout ratio in the third quarter was 89.4%), the BDC's stock should not be trading at a 10% premium to net asset value. Sixth Street Specialty Lending is a very high-quality business development company that deserves a higher net asset value multiple, especially given how well its credit is performing right now. Price To Book Value (YCharts) Why Sixth Street Specialty Lending Could See A Lower Valuation Sixth Street Specialty Lending's portfolio quality could suffer if the company experiences an increase in non-accruals, which is theoretically possible. Because Sixth Street Specialty Lending has a higher-than-average percentage of First Lien Debt in its portfolio, I believe TSLX is less likely to experience an increase in the non-accrual ratio.Seeking Alpha • Nov 02
Sixth Street Specialty Lending: A 10%-Yielding Gift For Investors
Summary Sixth Street Specialty Lending is a well-managed BDC that's well-positioned to weather market volatility and generate solid returns for investors. It has a diverse portfolio, a strong balance sheet, and is largely benefiting from rising rates. Management recently bumped up the dividend by 7%, and the stock looks appealing at present. I'm tempted to buy undervalued tech stocks in today's market, but dividend stocks are simply too appealing. That's because there's no telling what the market will do in the short-term, and it takes a certain level of patience to hold onto an unrealized loss that doesn't pay you anything. This brings me to Sixth Street Specialty Lending (TSLX), which remains undervalued and just announced a dividend raise. In this article, I highlight what makes TSLX a gift for dividend investors. Why TSLX? Sixth Street Specialty Lending is a BDC that invests in the U.S. middle market space, primarily through senior secured loans, and equity investments in portfolio companies. It targets companies with $10 to $250 million in annual EBITDA. Notably, TSLX benefits from its affiliation with its external advisor, Sixth Street, a global investment firm with over $50 billion in AUM. This robust management platform gives TSLX valuable line of sight and deal sourcing opportunities that it would not otherwise have. At present, it holds a diversified portfolio across 75 investments with an average investment size of $37 million, and its largest investment represents just 3.1% of the total portfolio. TSLX also maintains a conservative profile, with the vast majority of its investments (90%) being first-lien secured debt and just 1% being second-lien debt (also considered to be safe). Less than 1% of the portfolio is in the form of riskier mezzanine debt and 6% is in equity investments, giving TSLX NAV upside and capital gains potential. The portfolio remains well positioned, with higher exposure to defensive industries with recurring revenue streams. As shown below, business, internet, and financial services make up the top 3 industries, with consumer products and HR services rounding out the top 5, which comprise half of the portfolio's fair value. TSLX Portfolio Mix (Investor Presentation) Meanwhile, TSLX is benefiting from rising rates, as 98.9% of its debt investments are floating rate. As shown below, TSLX's weighted average yield on debt has soared along with rising interest rates since the start of the year, from 10.2% to 12.2% as of the end of the third quarter. TSLX Portfolio Yield (Investor Presentation) Also encouraging, TSLX's NAV per share actually increased by $0.09 sequentially to $16.36, despite a tumultuous time for both public and private market valuations. NII per share came in at $0.47, which more than covers TSLX's recent 7.1% dividend raise to $0.45 per share. This is also supported by a respectable BBB- rated balance sheet, with a debt to equity ratio of 1.17x, sitting well below the 2.0x statutory limit. Risks to TSLXL include general economic weakness, which could pressure borrowers' abilities to repay. In addition, high interest rates could pressure consumer demand and thereby impact the financial health of the borrowers. Nonetheless, TSLX exercises prudent underwriting standards, and its borrowers currently have a weighted average 1.9x coverage over financial covenants per credit agreement. TSLX's direct sourcing model (versus syndicated loans) also comes with distinct advantages, as it has effective voting control on 89% of debt investments, helping to ensure that TSLX retains some form of decision making capacity. TSLX also has plenty of firepower to expand the portfolio, as it currently has $846 million of undrawn capacity. Another inherent advantage to TSLX is the reputation that it's built with its investors. Since IPO in 2011, a $14.71 per share investment in TSLX is now worth $36.42 based on current NAV per share and cumulative regular and special dividends.Seeking Alpha • Aug 19
Sixth Street Specialty Lending: Buy This 8.6% Yield Before The Rebound
Sixth Street Specialty continued to cover its dividend with net investment income. The base dividend was raised 2.4% to $0.42 per share quarterly. The BDC had a strong quarter in terms of new investments. Growing portfolio yields and first lien-focus provide protection. Sixth Street Specialty Lending Inc. (TSLX) continued to perform well in the second quarter, despite the stock's performance. While the stock remained stagnant throughout the second quarter, the business development firm reported strong 2Q-22 results. Sixth Street Lending can easily sustain its current dividend payment because it continues to cover its dividend pay-out with adjusted net investment income. The BDC's first lien emphasis and high portfolio yields protect investors from loan and book value losses. First Lien-Focused, High Quality Investment Portfolio Sixth Street Lending is a high-quality business development firm because it focuses primarily on the highest quality types of debt, First Liens. Despite the fact that the BDC also invests in Second Liens, Mezzanine Debt, and Equity, the company has built a reputation as a conservative investor in the highest-interest-rate debt. First Liens accounted for 90% of Sixth Street Lending's investments based on fair value, a 1% decrease QoQ. The majority of new investments in 2Q-22, 82%, were also in First Liens, with equity investments accounting for the remaining 18%. Sixth Street Lending and its shareholders stand to benefit from equity investments in terms of valuation. Portfolio Highlights (Sixth Street Specialty Lending) Sixth Street Lending had a good second quarter in terms of investment activity. The business development company received $378.9 million in new investment commitments, with $324.8 million (or 86% of the total) funded. Sixth Street Lending has received $458.2 million in new investment commitments this year, with 82% of them funded. Sixth Street Lending's total net funded investment activity in 2Q-22 was $21.5 million, with $356.1 million in repayments. Sixth Street Lending may not exceed totals from the record year of 2021 in terms of new loan commitments, but 2022 is not going to be a bad year either. Investment Activity (Sixth Street Specialty Lending) Dividend Coverage Remains Excellent Sixth Street Lending's dividend pay-out ratio remained below 100% in 2Q-22, as adjusted net investment income of $0.42 exceeded the BDC's base dividend pay-out of $0.41 per share. Sixth Street Lending has paid out $1.64 per share in (base) dividends and earned adjusted net investment income of $2.09 per share over the last twelve months. The BDC's twelve-month pay-out ratio was only 78%. Dividend Coverage (Author Created Table Using Company Disclosures) High Portfolio Yields Funding costs for business development companies are rising as a result of the central bank's actions in June and July, which resulted in two large 75-basis-point increases, which may make it more difficult for them to earn consistently high portfolio yields. Having said that, Sixth Street Lending's portfolio yields have not yet been impacted by the increase in funding costs. Sixth Street Lending's weighted average yield on debt and income-producing investments was 10.3% in 2Q-22, up from 9.6% in 1Q-22. Net Interest Margin Analysis (Sixth Street Specialty Lending) Buy Before The Rebound TSLX traded in a relatively narrow range of $22-24 before beginning to consolidate in April and May. The stock is currently trading at $19.57 per share, representing a 20% premium to net asset value. TSLX has traded at higher NAV-multiples in 2022, and I believe the stock has a good chance of returning to its previous trading range given its 2Q-22 results, the portfolio remaining stable (albeit slightly growing) and the announcement of a 2.4% increase in its base dividend. TSLX stock now pays an 8.6% dividend yield based on the new dividend payout (not including variable and special dividends). TSLX Price to Book Value data by YCharts Why Sixth Street Specialty's Stock Could Decrease In ValueSeeking Alpha • Aug 10
Sixth Street Specialty Lending: A Solid BDC At The Right Price
TSLX is a well-run BDC with a strong track record of shareholder returns. It's well positioned for continued rising rates, with 99.2% of its debt portfolio being floating rate. Management sees incremental earnings from rising rates in the back half of the year. BDCs remain a great place for high yields, with many names still trading at bargain valuations. This includes Sixth Street Specialty Lending (TSLX), which still trades well below its $23-24 trading range from as recently as April of this year. TSLX recently posted its Q2 results, and in this article, I highlight what makes it a high-yield buy, so let's get started. Why TSLX? Sixth Street Specialty Lending is a BDC that invests in the U.S. middle market space, primarily through senior secured loans, and equity investments in portfolio companies. It benefits from its affiliation with its external advisor, Sixth Street, a global investment firm with over $50 billion in AUM. This robust management platform gives TSLX valuable line of sight and deal sourcing opportunities that it would not otherwise have. At present, TSLX has a $2.54 billion investment portfolio spread across 94 companies (up from 72 in the prior year period). It carries a rather safe investment profile that's comprised of 92% secured debt (90% first-lien, 2% second-lien) and 7% equity, which gives its net asset value upside potential through capital appreciation. What makes TSLX stand out is its strong track record of total returns. As shown below, TSLX has produced a 56% total return, outpacing the VanEck Vectors BDC Income ETF (BIZD) over the same timeframe. TSLX Total Return (Seeking Alpha) The portfolio is also well balanced, with low exposure to more economically sensitive industries such as hospitality and energy. As shown below, business, financial, HR, internet services, and healthcare make up TSLX's top 5 segments, making up 58% of the portfolio value, and no one investment makes up more than 3.4% of the portfolio total. TSLX Portfolio Mix (Investor Presentation) TSLX recently reported respectable Q2 results, with adjusted net investment income per share coming in at $0.42, giving management the comfort to raise the quarterly dividend by $0.01 to $0.42 per share. It's worth noting, however, that net asset value per share did decline by 3.4% on a sequential basis to $16.27. While this NAV decline may appear to be concerning on the surface, it's important to dig a bit deeper to understand why. The decline was not the result of realized losses on the investment portfolio, but rather due to unrealized losses stemming from the impact of widening credit spreads and lower implied equity values of portfolio investments. I don't believe this to be cause for concern, as private company valuations tend to follow that of volatility in equity markets, and in a recessionary environment, valuations of debt instruments get marked down relative to treasury bonds as investors require a higher risk premium. Moreover, portfolio quality remains in excellent shape, with nonaccruals representing just 0.1% of cost. Looking forward, TSLX is well-positioned for continued rising rates with 99.2% of its debt portfolio being floating rate. Its debt to equity ratio also declined on a quarter-on-quarter basis from 0.95x to 0.9x at the end of June, sitting below management's target leverage of 1.25x. This gives TSLX plenty of balance sheet flexibility to expand its portfolio. Management also sees incremental earnings from rising rates, as noted during the recent conference call: We expect to see meaningful positive asset sensitivity in the back half of the year. The combination of the rising rates in Q2 are now well above our average floor levels on our debt investments and the shape of the forward LIBOR or SOFR curve support that expectation. The rising rates will drive incremental interest income and outweigh the increases in the cost of our liabilities. To date, this has been largely muted because applicable reference rate resets occurred earlier in the quarter. Based on the shape of the forward curve and reset dates of our issuers, we project the remainder of this year that rate movement loan will result in approximately $0.13 per share of incremental net investment income purely from the core earnings power of the portfolio relative to what we experienced in Q2. In addition, to the extent we see portfolio growth over this period, the core earnings power of our business will be further enhanced.Seeking Alpha • Aug 03
Sixth Street Specialty Lending, Inc. raises quarterly base dividend
Sixth Street Specialty Lending, Inc. (NYSE:TSLX) declared $0.42/share quarterly base dividend, 2.4% increase from prior dividend of $0.41. Forward yield 8.84% Payable Sept. 30; for shareholders of record Sept. 15; ex-div Sept. 14. See TSLX Dividend Scorecard, Yield Chart, & Dividend Growth.Seeking Alpha • May 28
Sleep Well At Night With 8.0% Yielding Sixth Street
Sixth Street Specialty creates dependable dividend income from mainly first liens. The BDC covers its dividend with NII and provides three sources of dividend income. Floating rate exposure helps investors fight inflation.Seeking Alpha • Mar 19
Sixth Street Specialty Lending: Have Your Cake And Eat It Too
Recent volatility has knocked the share prices of top-tier BDCs off from their 52-week highs into more appetizing territory. Sixth Street has an extremely impressive track record, with among the best portfolio and financial metrics in the business. Add in a base dividend yield above 7%, and we’re interested. Many investors use the dividend yield as stated on popular finance/investment websites to compare the income of BDCs. But we have a better way.Seeking Alpha • Mar 10
Sixth Street Specialty Lending: Best-Of-Breed BDC With 7.2% Core Yield
Sixth Street has a well-covered dividend. Disciplined portfolio construction leads to low-volatility income. The stock deserves to trade at a premium.Seeking Alpha • Mar 02
Sixth Street Specialty Lending: Safe High Yield For A Rich Retirement
Sixth Street Specialty Lending is a well-run BDC with a strong track record of shareholder returns. It ended last year with record deal origination activity and maintains a healthy investment spread. The dividend is well-covered and the investment portfolio is in great shape with minimal non-accruals.Seeking Alpha • Dec 19
Buy This Inflation Resistant Dividend Monster: Sixth Street
This article discusses why TSLX is my largest holding. TSLX has top-notch management continually focused on returns to shareholders or ROE. TSLX has provided investors with excellent returns over the short and long term. Please see the end of the article for my previous TSLX purchases along with returns for each purchase. The portfolio is mostly secured first-lien in non-cyclical sectors and companies with less or no inflation-related exposure. Higher yield investments such as TSLX will likely become even more attractive in an inflationary environment as investors seek additional income from invested capital.Seeking Alpha • Dec 07
Sixth Street: An Excellent BDC That Gives You Stocking Stuffers
TSLX has a strong track record of shareholder returns through NAV/share growth, and regular plus special dividends. Management appears to be shareholder-friendly, with a share repurchase program in place should the share price reach a certain level respective to NAV. It maintains a strong balance sheet that's on par with Main Street Capital and has plenty of liquidity to fund its investment pipeline.Seeking Alpha • Sep 23
7.4% Yield Plus Bonus: Buy Sixth Street Specialty Lending
Sixth Street Specialty Lending is a well-run BDC with a strong track record of shareholder returns. It pays a well-covered regular dividend and special dividends as an added kicker. I highlight why the recent share price weakness is a buying opportunity.Seeking Alpha • Jul 13
Pound For Pound, Sixth Street Is One Of The Best BDCs Around
Sixth Street, previously known as TPG Specialty Lending, has an extremely impressive track record. This credit manager has historically applied disciplined underwriting, as indicated by an array of statistics. Whether based on good old-fashioned total returns, accounting measures like net investment income ROE, or NAV growth per share… few BDCs can compete.Seeking Alpha • Jun 21
Bag A 7.6% Yield With Sixth Street Specialty Lending
Sixth Street Specialty Lending is a well-managed BDC that's produced market-beating returns for shareholders since its IPO. It continues to perform well, with a very low non-accrual rate. Its yield on investments has also held up well. I also highlight the dividend, balance sheet, valuation, and other points worth considering.Shareholder Returns
| TSLX | US Capital Markets | US Market | |
|---|---|---|---|
| 7D | 1.7% | -5.2% | -2.5% |
| 1Y | -28.9% | 0.7% | 19.0% |
Return vs Industry: TSLX underperformed the US Capital Markets industry which returned 1.3% over the past year.
Return vs Market: TSLX underperformed the US Market which returned 20% over the past year.
Price Volatility
| TSLX volatility | |
|---|---|
| TSLX Average Weekly Movement | 4.6% |
| Capital Markets Industry Average Movement | 3.8% |
| Market Average Movement | 7.2% |
| 10% most volatile stocks in US Market | 16.8% |
| 10% least volatile stocks in US Market | 3.1% |
Stable Share Price: TSLX has not had significant price volatility in the past 3 months compared to the US market.
Volatility Over Time: TSLX's weekly volatility (5%) has been stable over the past year.
About the Company
| Founded | Employees | CEO | Website |
|---|---|---|---|
| 2010 | n/a | Bo Stanley | www.sixthstreetspecialtylending.com |
Sixth Street Specialty Lending, Inc. (NYSE: TSLX) is a business development company. The fund provides senior secured loans (first-lien, second-lien, and unitranche), unsecured loans, mezzanine debt, and investments in corporate bonds and equity securities and structured products, non-control structured equity, and common equity with a focus on co-investments for organic growth, acquisitions, market or product expansion, restructuring initiatives, recapitalizations, growth capital, buyout, and refinancing. The fund invests in business services, software & technology, healthcare, energy, consumer & retail, manufacturing, industrials, royalty related businesses, education, and specialty finance.
Sixth Street Specialty Lending, Inc. Fundamentals Summary
| TSLX fundamental statistics | |
|---|---|
| Market cap | US$1.60b |
| Earnings (TTM) | US$107.54m |
| Revenue (TTM) | US$426.10m |
14.9x
P/E Ratio3.8x
P/S RatioIs TSLX overvalued?
See Fair Value and valuation analysisEarnings & Revenue
| TSLX income statement (TTM) | |
|---|---|
| Revenue | US$426.10m |
| Cost of Revenue | US$0 |
| Gross Profit | US$426.10m |
| Other Expenses | US$318.57m |
| Earnings | US$107.54m |
Last Reported Earnings
Mar 31, 2026
Next Earnings Date
n/a
| Earnings per share (EPS) | 1.13 |
| Gross Margin | 100.00% |
| Net Profit Margin | 25.24% |
| Debt/Equity Ratio | 116.9% |
How did TSLX perform over the long term?
See historical performance and comparisonDividends
10.5%
Current Dividend Yield175%
Payout RatioDoes TSLX pay a reliable dividends?
See TSLX dividend history and benchmarks| Sixth Street Specialty Lending dividend dates | |
|---|---|
| Ex Dividend Date | Jun 15 2026 |
| Dividend Pay Date | Jun 30 2026 |
| Days until Ex dividend | 13 days |
| Days until Dividend pay date | 2 days |
Does TSLX pay a reliable dividends?
See TSLX dividend history and benchmarksCompany Analysis and Financial Data Status
| Data | Last Updated (UTC time) |
|---|---|
| Company Analysis | 2026/06/28 05:55 |
| End of Day Share Price | 2026/06/26 00:00 |
| Earnings | 2026/03/31 |
| Annual Earnings | 2025/12/31 |
Data Sources
The data used in our company analysis is from S&P Global Market Intelligence LLC. The following data is used in our analysis model to generate this report. Data is normalised which can introduce a delay from the source being available.
| Package | Data | Timeframe | Example US Source * |
|---|---|---|---|
| Company Financials | 10 years |
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| Analyst Consensus Estimates | +3 years |
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| Market Prices | 30 years |
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| Ownership | 10 years |
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| Management | 10 years |
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| Key Developments | 10 years |
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* Example for US securities, for non-US equivalent regulatory forms and sources are used.
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more.
Analysis Model and Snowflake
Details of the analysis model used to generate this report is available on our Github page, we also have guides on how to use our reports and tutorials on Youtube.
Learn about the world class team who designed and built the Simply Wall St analysis model.
Industry and Sector Metrics
Our industry and section metrics are calculated every 6 hours by Simply Wall St, details of our process are available on Github.
Analyst Sources
Sixth Street Specialty Lending, Inc. is covered by 14 analysts. 11 of those analysts submitted the estimates of revenue or earnings used as inputs to our report. Analysts submissions are updated throughout the day.
| Analyst | Institution |
|---|---|
| Mark DeVries | Barclays |
| Derek Hewett | BofA Global Research |
| Mitchel Penn | Brean Capital Historical (Janney Montgomery) |