Reviewing Kayne Anderson BDC (NYSE:KBDC) & Barings Bdc (NYSE:BBDC)

Kayne Anderson BDC (NYSE:KBDC) and Barings Bdc (NYSE:BBDC) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, profitability, institutional ownership, valuation, dividends, analyst recommendations and risk.

Institutional and Insider Ownership

44.1% of Barings Bdc shares are owned by institutional investors. 2.9% of Kayne Anderson BDC shares are owned by company insiders. Comparatively, 0.6% of Barings Bdc shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Kayne Anderson BDC and Barings Bdc”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kayne Anderson BDC	$235.82 million	4.08	$93.71 million	$1.28	11.34
Barings Bdc	$279.21 million	3.16	$101.92 million	$0.85	9.90

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Kayne Anderson BDC	37.30%	10.47%	5.14%
Barings Bdc	32.45%	10.08%	4.33%

Volatility and Risk

Kayne Anderson BDC has a beta of 0.28, suggesting that its stock price is 72% less volatile than the S&P 500. Comparatively, Barings Bdc has a beta of 0.61, suggesting that its stock price is 39% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings for Kayne Anderson BDC and Barings Bdc, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kayne Anderson BDC	0	1	3	0	2.75
Barings Bdc	0	3	1	0	2.25

Kayne Anderson BDC currently has a consensus target price of $15.38, indicating a potential upside of 5.95%. Barings Bdc has a consensus target price of $9.50, indicating a potential upside of 12.89%. Given Barings Bdc’s higher probable upside, analysts plainly believe Barings Bdc is more favorable than Kayne Anderson BDC.

Dividends

Kayne Anderson BDC pays an annual dividend of $1.60 per share and has a dividend yield of 11.0%. Barings Bdc pays an annual dividend of $1.04 per share and has a dividend yield of 12.4%. Kayne Anderson BDC pays out 125.0% 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 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. Barings Bdc is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Kayne Anderson BDC beats Barings Bdc on 9 of the 17 factors compared between the two stocks.

About Kayne Anderson BDC

Kayne Anderson BDC Inc. is a business development company which invests primarily in first lien senior secured loans, with a secondary focus on unitranche and split-lien loans to middle market companies. Kayne Anderson BDC Inc. is based in CHICAGO.

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.