High-Performing Shares Offering 8-10% Returns Potentially Suitable for Future Ventures

In the ever-evolving world of finance, one investment firm, Sixth Street Specialty Lending (TSLX), has been making waves. TSLX focuses on first-lien senior secured loans in non-cyclical industries like healthcare, software, business services, and "off-the-run" investments.

Recent predictions by financial analysts suggest that the Trump Administration may prioritize economic growth over fighting inflation, which could be bullish for cyclical value stocks. An article titled "One Of My Boldest Calls Ever, I Expect To Build Generational Wealth" discusses this belief, and it could have significant implications for TSLX.

The renewed optimism, if realised, could be extremely bullish for cyclical value stocks, particularly Business Development Companies (BDCs), private lenders targeting small to medium-sized enterprises by providing capital and helping to grow these companies. Three such BDCs that could benefit from this scenario are Ares Capital Corporation (ARCC), FS KKR Capital Corp. (FSK), and Owl Rock Capital Corporation (ORCC).

TSLX's investment portfolio, totalling $3.3 billion, boasts a non-accrual rating of just 0.6% at fair value, a 2.1x interest coverage ratio, and an overall risk rating of 1.1. These figures underscore the firm's strong financial position.

In Q2'25, TSLX reported a net investment income of $0.56 per share, including accrued capital gains and incentive expenses. The company's board has also approved a base dividend of $0.46 (7.7% yield) and a supplemental dividend of $0.05, bringing the combined annualized yield to 8.5% with a coverage ratio of 106%.

Meanwhile, Blackstone Secured Lending Fund (BXSL) stands out with a lower non-accruals (0.3% vs. 2.7%), PIK income (6.4% vs. 11.3%), and stressed investments (0.7% vs. 4.3%) compared to peers. BXSL's portfolio consists of 295 portfolio companies with a weighted average EBITDA of roughly $220 million and a loan-to-value ratio of 47%. In Q2'25, BXSL reported NII of $0.77 per share, which translates to an 11.2% annualized return on equity. It pays $0.77 in dividends, implying a 100% coverage ratio and a yield of 10.3%.

The optimistic economic outlook is based on the passing of the One Big Beautiful Bill, which achieves business tax incentives, individual tax cuts, and small business support, potentially paving the road for broader economic growth, an upswing in manufacturing, and higher-for-longer inflation.

Analysts like Albert Marko and Tony Nash believe that a bold and deliberate strategy is emerging from Washington, aiming to weaken the U.S. dollar, boost exports, revive domestic manufacturing, and sustain financial markets. This shift in macroeconomic approach could further bolster the prospects of TSLX and BDCs.

In conclusion, the pro-growth economic climate, coupled with the strong financial positions of TSLX and BDCs, presents exciting opportunities for investors seeking high yields and robust credit fundamentals.