Blackrock Tcp Capital (NASDAQ:TCPC) and Barings Bdc (NYSE:BBDC) Financial Analysis

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Blackrock Tcp Capital	-66.92%	14.30%	5.47%
Barings Bdc	32.45%	10.08%	4.33%

Volatility & Risk

Blackrock Tcp Capital has a beta of 0.98, meaning that its stock price is 2% less volatile than the S&P 500. Comparatively, Barings Bdc has a beta of 0.61, meaning that its stock price is 39% less volatile than the S&P 500.

Dividends

Blackrock Tcp Capital pays an annual dividend of $0.68 per share and has a dividend yield of 16.2%. Barings Bdc pays an annual dividend of $1.04 per share and has a dividend yield of 12.0%. Blackrock Tcp Capital pays out -45.6% of its earnings in the form of a dividend. Barings Bdc pays out 122.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Barings Bdc has increased its dividend for 3 consecutive years. Blackrock Tcp Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a summary of current ratings and target prices for Blackrock Tcp Capital and Barings Bdc, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Blackrock Tcp Capital	3	1	0	0	1.25
Barings Bdc	0	3	2	0	2.40

Blackrock Tcp Capital currently has a consensus price target of $3.50, indicating a potential downside of 16.77%. Barings Bdc has a consensus price target of $9.67, indicating a potential upside of 11.30%. Given Barings Bdc’s stronger consensus rating and higher probable upside, analysts clearly believe Barings Bdc is more favorable than Blackrock Tcp Capital.

Earnings & Valuation

This table compares Blackrock Tcp Capital and Barings Bdc”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Blackrock Tcp Capital	-$112.61 million	-3.13	-$88.93 million	($1.49)	-2.82
Barings Bdc	$279.21 million	3.26	$101.92 million	$0.85	10.22

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

Institutional and Insider Ownership

44.1% of Barings Bdc shares are owned by institutional investors. 0.4% of Blackrock Tcp Capital shares are owned by insiders. Comparatively, 0.6% of Barings Bdc shares are owned by 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.

Summary

Barings Bdc beats Blackrock Tcp Capital on 12 of the 17 factors compared between the two stocks.

About Blackrock Tcp Capital

BlackRock TCP Capital Corp. is a business development company specializing in direct equity and debt investments in middle-market, small businesses, debt securities, senior secured loans, junior loans, originated loans, mezzanine, senior debt instruments, bonds, and secondary-market investments. It typically invests in communication services, public relations services, television, wireless telecommunication services, apparel, textile mills, restaurants, retailing, energy, oil and gas extraction, Patent owners and Lessors, Federal and Federally- Sponsored Credit agencies, insurance, hospital and healthcare centers, Biotechnology, engineering services, heavy electrical equipment, tax accounting, scientific and related consulting services, charter freight air transportation, Information technology consulting, application hosting services, software diagram and design, computer aided design, communication equipment, electronics manufacturing equipment, computer components, chemicals. It seeks to invest in the United States. The fund typically invests between $10 million and $35 million in companies with enterprise values between $100 million and $1500 million including complex situations. It prefers to make equity investments in companies for an ownership stake.

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.