Golub Capital BDC (NASDAQ: GBDC) and TICC Capital (NASDAQ:TICC) are both small-cap financials companies, but which is the better business? We will contrast the two companies based on the strength of their valuation, risk, dividends, analyst recommendations, profitability, institutional ownership and earnings.
Golub Capital BDC pays an annual dividend of $1.28 per share and has a dividend yield of 7.1%. TICC Capital pays an annual dividend of $0.80 per share and has a dividend yield of 13.8%. Golub Capital BDC pays out 88.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. TICC Capital pays out 76.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. TICC Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.
This table compares Golub Capital BDC and TICC Capital’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Golub Capital BDC||$137.76 million||7.78||$82.28 million||$1.45||12.41|
|TICC Capital||$69.28 million||4.31||$110.36 million||$1.05||5.52|
TICC Capital has lower revenue, but higher earnings than Golub Capital BDC. TICC Capital is trading at a lower price-to-earnings ratio than Golub Capital BDC, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of recent ratings and price targets for Golub Capital BDC and TICC Capital, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Golub Capital BDC||0||3||0||0||2.00|
Golub Capital BDC presently has a consensus price target of $19.50, suggesting a potential upside of 8.39%. TICC Capital has a consensus price target of $5.50, suggesting a potential downside of 5.17%. Given Golub Capital BDC’s stronger consensus rating and higher possible upside, research analysts clearly believe Golub Capital BDC is more favorable than TICC Capital.
Volatility & Risk
Golub Capital BDC has a beta of 0.67, meaning that its stock price is 33% less volatile than the S&P 500. Comparatively, TICC Capital has a beta of 0.65, meaning that its stock price is 35% less volatile than the S&P 500.
Institutional & Insider Ownership
40.6% of Golub Capital BDC shares are owned by institutional investors. Comparatively, 15.9% of TICC Capital shares are owned by institutional investors. 2.4% of Golub Capital BDC shares are owned by insiders. Comparatively, 5.9% of TICC Capital shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
This table compares Golub Capital BDC and TICC Capital’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Golub Capital BDC||58.06%||7.90%||4.06%|
Golub Capital BDC beats TICC Capital on 9 of the 16 factors compared between the two stocks.
About Golub Capital BDC
Golub Capital BDC, Inc. is an externally managed, non-diversified, closed-end, management investment company. The Company’s investment objective is to generate current income and capital appreciation by investing primarily in senior secured and one stop loans of the United States middle-market companies. It may also selectively invest in second lien and subordinated loans of, and warrants and minority equity securities in the United States middle-market companies. The Company seeks to create a portfolio that includes primarily senior secured and one stop loans by primarily investing in the securities of the United States middle-market companies. It generally invests in securities that have been rated below investment grade by independent rating agencies or that would be rated below investment grade if they were rated. The Company’s investment activities are managed by its investment advisor, GC Advisors LLC (GC Advisors).
About TICC Capital
TICC Capital Corp. is a closed-end, non-diversified management investment company. The Company’s investment objective is to maximize its portfolio’s total return. The Company primarily focuses on seeking current income by investing primarily in corporate debt securities. The Company’s debt investments may include syndicated loans and bilateral loans. The Company holds interests in structured finance investments, including collateralized loan obligation (CLO) investment vehicles that own debt securities. CLO investments may also include warehouse facilities, which are financing structures intended to aggregate loans that may be used to form the basis of a CLO vehicle. The Company may also invest in publicly traded debt and/or equity securities. Its portfolio includes its investments in various industries, such as structured finance, telecommunication services, business services, printing and publishing, and financial intermediaries. TICC Management, LLC is its investment advisor.
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