Analyzing Nuveen Churchill Direct Lending (NYSE:NCDL) & Rand Capital (NASDAQ:RAND)

Nuveen Churchill Direct Lending (NYSE:NCDL) and Rand Capital (NASDAQ:RAND) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, analyst recommendations, dividends, institutional ownership, earnings, valuation and profitability.

Profitability

This table compares Nuveen Churchill Direct Lending and Rand Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Nuveen Churchill Direct Lending	31.57%	10.48%	4.47%
Rand Capital	-124.17%	6.55%	6.40%

Analyst Recommendations

This is a breakdown of current recommendations for Nuveen Churchill Direct Lending and Rand Capital, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nuveen Churchill Direct Lending	0	4	2	0	2.33
Rand Capital	1	0	0	0	1.00

Nuveen Churchill Direct Lending presently has a consensus price target of $15.40, suggesting a potential upside of 16.42%. Given Nuveen Churchill Direct Lending’s stronger consensus rating and higher probable upside, analysts plainly believe Nuveen Churchill Direct Lending is more favorable than Rand Capital.

Valuation & Earnings

This table compares Nuveen Churchill Direct Lending and Rand Capital”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nuveen Churchill Direct Lending	$207.86 million	3.14	$65.61 million	$1.31	10.10
Rand Capital	$6.47 million	5.27	-$8.04 million	($2.69)	-4.26

Nuveen Churchill Direct Lending has higher revenue and earnings than Rand Capital. Rand Capital is trading at a lower price-to-earnings ratio than Nuveen Churchill Direct Lending, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Nuveen Churchill Direct Lending has a beta of 0.32, indicating that its stock price is 68% less volatile than the S&P 500. Comparatively, Rand Capital has a beta of 0.16, indicating that its stock price is 84% less volatile than the S&P 500.

Dividends

Nuveen Churchill Direct Lending pays an annual dividend of $1.44 per share and has a dividend yield of 10.9%. Rand Capital pays an annual dividend of $1.16 per share and has a dividend yield of 10.1%. Nuveen Churchill Direct Lending pays out 109.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Rand Capital pays out -43.1% of its earnings in the form of a dividend.

Summary

Nuveen Churchill Direct Lending beats Rand Capital on 11 of the 14 factors compared between the two stocks.

About Nuveen Churchill Direct Lending

Nuveen Churchill Direct Lending Corp. is a specialty finance company focused primarily on investing in senior secured loans to private equity-owned U.S. middle market companies. It has elected to be regulated as a business development company. Nuveen Churchill Direct Lending Corp. is based in NEW YORK.

About Rand Capital

Rand Capital Corporation is a business development company specializing in subordinated debt with warrants or preferred equity and venture capital investments. Within private equity, the firm specializing in capital growth and lower middle market investments. Within venture capital, it specializing in early to late-stage private businesses. It does not prefer to invest in real estate sector. It prefers to invest in software, professional services, manufacturing, consumer, healthcare, automotive and public d stocks. It prefers to invest in East or Midwest U.S. operations sectors. It typically invests between $0.75 million and $5 million with initial target size of $1.5 million. It seeks to invest in companies having more than $2 million in revenue or having excess of $1.5 million and up to $5 million in EBITDA. It prefers to be a minority stake and seeks to take a Board seat in its portfolio companies. It typically holds its investments for a period up to five years.