Horizon Technology Finance (NASDAQ:HRZN) vs. Blackstone Secured Lending Fund (NYSE:BXSL) Critical Comparison

Horizon Technology Finance (NASDAQ:HRZN) and Blackstone Secured Lending Fund (NYSE:BXSL) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, earnings, analyst recommendations, risk, valuation, dividends and institutional ownership.

Analyst Recommendations

This is a breakdown of recent recommendations for Horizon Technology Finance and Blackstone Secured Lending Fund, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Horizon Technology Finance	1	5	1	0	2.00
Blackstone Secured Lending Fund	1	3	5	0	2.44

Horizon Technology Finance currently has a consensus target price of $5.65, indicating a potential upside of 40.90%. Blackstone Secured Lending Fund has a consensus target price of $25.13, indicating a potential upside of 7.58%. Given Horizon Technology Finance’s higher probable upside, equities research analysts clearly believe Horizon Technology Finance is more favorable than Blackstone Secured Lending Fund.

Dividends

Horizon Technology Finance pays an annual dividend of $0.72 per share and has a dividend yield of 18.0%. Blackstone Secured Lending Fund pays an annual dividend of $3.08 per share and has a dividend yield of 13.2%. Horizon Technology Finance pays out 167.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Blackstone Secured Lending Fund pays out 161.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares Horizon Technology Finance and Blackstone Secured Lending Fund’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Horizon Technology Finance	22.55%	13.63%	5.53%
Blackstone Secured Lending Fund	31.63%	11.73%	5.12%

Volatility & Risk

Horizon Technology Finance has a beta of 0.99, suggesting that its share price is 1% less volatile than the S&P 500. Comparatively, Blackstone Secured Lending Fund has a beta of 0.4, suggesting that its share price is 60% less volatile than the S&P 500.

Institutional and Insider Ownership

4.9% of Horizon Technology Finance shares are held by institutional investors. Comparatively, 36.5% of Blackstone Secured Lending Fund shares are held by institutional investors. 1.3% of Horizon Technology Finance shares are held by company insiders. Comparatively, 0.1% of Blackstone Secured Lending Fund shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Horizon Technology Finance and Blackstone Secured Lending Fund”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Horizon Technology Finance	$96.02 million	2.85	-$2.66 million	$0.43	9.33
Blackstone Secured Lending Fund	$1.42 billion	3.83	$563.46 million	$1.91	12.23

Blackstone Secured Lending Fund has higher revenue and earnings than Horizon Technology Finance. Horizon Technology Finance is trading at a lower price-to-earnings ratio than Blackstone Secured Lending Fund, indicating that it is currently the more affordable of the two stocks.

Summary

Blackstone Secured Lending Fund beats Horizon Technology Finance on 10 of the 16 factors compared between the two stocks.

About Horizon Technology Finance

Horizon Technology Finance Corporation is a business development company specializing in lending and and investing in development-stage investments. It focuses on making secured debt and venture lending investments to venture capital backed companies in the technology, life science, healthcare information and services, cleantech and sustainability industries. It seeks to invest in companies in the United States.

About Blackstone Secured Lending Fund

Blackstone Secured Lending Fund is business development company and a Delaware statutory trust formed on March 26, 2018, and structured as an externally managed, non-diversified closed-end investment Fund. On October 26, 2018, the fund elected to be regulated as a business development company (BDC) under the Investment Company Act of 1940, as amended (the 1940 Act). In addition, the Fund elected to be treated for U.S. federal income tax purposes, as a regulated investment company (RIC), as defined under Subchapter M of the Internal Revenue Code of 1986, as amended (the Code). The fund also intends to continue to comply with the requirements prescribed by the Code in order to maintain tax treatment as a RIC. The fund's investment objectives are to generate current income and, to a lesser extent, long-term capital appreciation. The Fund seeks to achieve its investment objective primarily through originated loans, equity and other securities, including syndicated loans, of private U.S. companies, specifically small and middle market companies, typically in the form of first lien senior secured and unitranche loans (including first out/last out loans), and to a lesser extent, second lien, third lien, unsecured and subordinated loans and other debt and equity securities.