Financial Contrast: Barings Bdc (NYSE:BBDC) versus MarketWise (NASDAQ:MKTW)

Barings Bdc (NYSE:BBDC) and MarketWise (NASDAQ:MKTW) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, risk, earnings, analyst recommendations, dividends, institutional ownership and profitability.

Volatility & Risk

Barings Bdc has a beta of 0.64, indicating that its stock price is 36% less volatile than the S&P 500. Comparatively, MarketWise has a beta of 0.21, indicating that its stock price is 79% less volatile than the S&P 500.

Insider & Institutional Ownership

44.1% of Barings Bdc shares are held by institutional investors. Comparatively, 23.0% of MarketWise shares are held by institutional investors. 0.6% of Barings Bdc shares are held by company insiders. Comparatively, 29.9% of MarketWise shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares Barings Bdc and MarketWise’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Barings Bdc	32.73%	10.07%	4.38%
MarketWise	0.70%	-0.96%	1.10%

Earnings and Valuation

This table compares Barings Bdc and MarketWise”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Barings Bdc	$279.21 million	3.12	$101.92 million	$0.83	10.03
MarketWise	$328.12 million	0.87	$5.62 million	$0.88	20.50

Barings Bdc has higher earnings, but lower revenue than MarketWise. Barings Bdc is trading at a lower price-to-earnings ratio than MarketWise, indicating that it is currently the more affordable of the two stocks.

Dividends

Barings Bdc pays an annual dividend of $1.04 per share and has a dividend yield of 12.5%. MarketWise pays an annual dividend of $1.00 per share and has a dividend yield of 5.5%. Barings Bdc pays out 125.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. MarketWise pays out 113.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Barings Bdc has raised its dividend for 3 consecutive years and MarketWise has raised its dividend for 1 consecutive years. Barings Bdc is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of current ratings and target prices for Barings Bdc and MarketWise, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Barings Bdc	0	4	1	0	2.20
MarketWise	0	1	1	0	2.50

Barings Bdc presently has a consensus price target of $9.75, suggesting a potential upside of 17.12%. Given Barings Bdc’s higher possible upside, analysts clearly believe Barings Bdc is more favorable than MarketWise.

Summary

Barings Bdc beats MarketWise on 10 of the 16 factors compared between the two stocks.

About Barings Bdc

Barings BDC, Inc. is a publicly traded, externally managed investment company that has elected to be treated as a business development company under the Investment Company Act of 1940. It seeks to invest primarily in senior secured loans, first lien debt, unitranche, second lien debt, subordinated debt, equity co-investments and senior secured private debt investments in private middle-market companies that operate across a wide range of industries. It specializes in mezzanine, leveraged buyouts, management buyouts, ESOPs, change of control transactions, acquisition financings, growth financing, and recapitalizations in lower middle market, mature, and later stage companies. It invests in manufacturing and distribution; business services and technology; transportation and logistics; consumer product and services. It invests in United States. It invests in companies with EBITDA of $10 million to $75 million, typically in private equity sponsor backed.

About MarketWise

MarketWise, Inc. operates a content and technology multi-brand platform for self-directed investors in the United States and Internationally. Its platform includes subscription businesses that provides financial research, software, education, and tools to navigate the financial markets. The company offers various investment strategies, such as value investing, income, growth, commodities, cryptocurrencies, venture, crowdfunded investing, biotechnology, mutual funds, options, and trading; investment research product portfolio through a range of media, including desktops, laptops, tablets, and mobile; and financial newsletters. It provides a suite of stock research tools and portfolio management services under the Chaikin Analytics brand; portfolio management software tools under the TradeSmith brand name; and database of accounting-based financial summaries under the Altimetry brand. In addition, the company develops screeners, monitors, portfolio management tools, and proprietary indicators that produce a composite score to rank publicly traded companies. The company was founded in 1999 and is headquartered in Baltimore, Maryland.