Golub Capital BDC (GBDC) is anticipated to produce a total return of around 22% over the next year, with dividend yield providing a key boost, RBC Capital Markets said in a Friday note initiating coverage of the company.

Golub is centered on the core middle market segment within direct lending, which is relatively differentiated compared to peers, and is an "attractive opportunity," RBC analysts said. They said that securing covenants and favorable terms is simpler to secure in the middle market segment compared with large-scale firms.

The company has had relatively lower realized losses on average than most of its business development company peers from 2009, with a net positive gain of about 6 basis points since inception, the analysts said. They also noted that Golub had less volatility on its losses.

RBC analysts project the company's adjusted net investment income of $1.42 per share for fiscal 2026 and $1.33 for fiscal 2027.

RBC initiated coverage of the company's stock at outperform with a price target of $15.

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