Carlyle Secured Lending (NASDAQ:CGBD) and TriplePoint Venture Growth BDC (NYSE:TPVG) Critical Comparison

Carlyle Secured Lending (NASDAQ:CGBD) and TriplePoint Venture Growth BDC (NYSE:TPVG) are both small-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, earnings, institutional ownership, analyst recommendations, valuation, profitability and risk.

Valuation and Earnings

This table compares Carlyle Secured Lending and TriplePoint Venture Growth BDC”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Carlyle Secured Lending	$255.57 million	2.94	$69.97 million	$0.71	15.23
TriplePoint Venture Growth BDC	$90.93 million	2.47	$49.21 million	$1.06	5.23

Carlyle Secured Lending has higher revenue and earnings than TriplePoint Venture Growth BDC. TriplePoint Venture Growth BDC is trading at a lower price-to-earnings ratio than Carlyle Secured Lending, indicating that it is currently the more affordable of the two stocks.

Dividends

Carlyle Secured Lending pays an annual dividend of $1.60 per share and has a dividend yield of 14.8%. TriplePoint Venture Growth BDC pays an annual dividend of $0.92 per share and has a dividend yield of 16.6%. Carlyle Secured Lending pays out 225.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. TriplePoint Venture Growth BDC pays out 86.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. TriplePoint Venture Growth BDC is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Carlyle Secured Lending and TriplePoint Venture Growth BDC’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Carlyle Secured Lending	19.52%	8.99%	4.01%
TriplePoint Venture Growth BDC	46.77%	11.54%	4.97%

Analyst Ratings

This is a breakdown of recent ratings and price targets for Carlyle Secured Lending and TriplePoint Venture Growth BDC, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Carlyle Secured Lending	0	4	3	0	2.43
TriplePoint Venture Growth BDC	2	4	0	0	1.67

Carlyle Secured Lending currently has a consensus price target of $12.50, indicating a potential upside of 15.63%. TriplePoint Venture Growth BDC has a consensus price target of $5.63, indicating a potential upside of 1.52%. Given Carlyle Secured Lending’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Carlyle Secured Lending is more favorable than TriplePoint Venture Growth BDC.

Institutional & Insider Ownership

24.5% of Carlyle Secured Lending shares are held by institutional investors. Comparatively, 12.8% of TriplePoint Venture Growth BDC shares are held by institutional investors. 0.6% of Carlyle Secured Lending shares are held by company insiders. Comparatively, 1.6% of TriplePoint Venture Growth BDC shares are held by company 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.

Volatility and Risk

Carlyle Secured Lending has a beta of 0.66, suggesting that its share price is 34% less volatile than the S&P 500. Comparatively, TriplePoint Venture Growth BDC has a beta of 1.28, suggesting that its share price is 28% more volatile than the S&P 500.

About Carlyle Secured Lending

Carlyle Secured Lending, Inc. is business development company specializing in first lien debt, senior secured loans, second lien senior secured loan unsecured debt, mezzanine debt and investments in equities. It specializes in directly investing. It specializes in middle market. It targets healthcare and pharmaceutical, aerospace and defense, high tech industries, business services, software, beverage food and tobacco, hotel gamming and leisure, banking finance insurance and in real estate sector. The fund seeks to invest across United States of America, Luxembourg, Cayman Islands, Cyprus, and United Kingdom. It invests in companies with EBITDA between $25 million and $100 million.

About TriplePoint Venture Growth BDC

TriplePoint Venture Growth BDC Corp. is a business development company specializing investments in venture capital-backed companies at the growth stage investments. It also provides debt financing to venture growth space companies which includes growth capital loans, secured and customized loans, equipment financings, revolving loans and direct equity investments. The fund seeks to invest in e-commerce, entertainment, technology and life sciences sector. Within technology the areas of focus include: Security, wireless communication equipments, network system and software, business applications software, conferencing equipments/services .big data, cloud computing, data storage, electronics, energy efficiency, hardware, information services, internet and media, networking, semiconductors, software, software as a service, and other technology related subsectors and within life sciences the areas of focus include: biotechnology, bio fuels/bio mass, diagnostic testing and bioinformatics, drug delivery, drug discovery, healthcare information systems, healthcare services, medical, surgical and therapeutic devices, pharmaceuticals and other life science related subsectors. Within growth capital loans it invests between $5 million and $50 million, for equipment financings it invests between $5 million and $25 million, for revolving loans it invests between $1 million and $25 million, and for direct equity investments it may invest between $0.1 million and $5 million (generally not exceeding 5% of the company’s total equity). The debt financing products are typically structured as lines of credit and it invests through warrants and secured loans. It targeted returns between 10% and 18%. It does not take board seat in the company.