BlackRock (NYSE: BLK) and Garrison Capital (NASDAQ:GARS) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, profitability, analyst recommendations, earnings, risk, valuation and dividends.

Earnings & Valuation

This table compares BlackRock and Garrison Capital’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
BlackRock $11.52 billion 6.52 $5.06 billion $20.84 22.23
Garrison Capital N/A N/A N/A N/A N/A

BlackRock has higher revenue and earnings than Garrison Capital.

Dividends

BlackRock pays an annual dividend of $10.00 per share and has a dividend yield of 2.2%. Garrison Capital pays an annual dividend of $1.12 per share and has a dividend yield of 13.3%. BlackRock pays out 48.0% of its earnings in the form of a dividend. BlackRock has increased its dividend for 7 consecutive years.

Risk & Volatility

BlackRock has a beta of 1.72, indicating that its stock price is 72% more volatile than the S&P 500. Comparatively, Garrison Capital has a beta of 0.24, indicating that its stock price is 76% less volatile than the S&P 500.

Institutional and Insider Ownership

82.5% of BlackRock shares are held by institutional investors. Comparatively, 22.0% of Garrison Capital shares are held by institutional investors. 1.9% of BlackRock shares are held by company insiders. Comparatively, 5.8% of Garrison Capital shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares BlackRock and Garrison Capital’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
BlackRock 29.92% 11.74% 1.53%
Garrison Capital -0.38% 8.33% 3.97%

Analyst Ratings

This is a summary of current recommendations and price targets for BlackRock and Garrison Capital, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
BlackRock 0 3 9 0 2.75
Garrison Capital 0 5 1 0 2.17

BlackRock presently has a consensus target price of $459.09, suggesting a potential downside of 0.89%. Garrison Capital has a consensus target price of $10.17, suggesting a potential upside of 21.03%. Given Garrison Capital’s higher probable upside, analysts plainly believe Garrison Capital is more favorable than BlackRock.

Summary

BlackRock beats Garrison Capital on 9 of the 14 factors compared between the two stocks.

About BlackRock

BlackRock, Inc. (BlackRock) is an investment management company. BlackRock provides a range of investment and risk management services to institutional and retail clients worldwide. Its diverse platform of active (alpha) and index (beta) investment strategies across asset classes enables the Company to tailor investment outcomes and asset allocation solutions for clients. Its product offerings include single- and multi-asset portfolios investing in equities, fixed income, alternatives and money market instruments. Its products are offered directly and through intermediaries in a range of vehicles, including open-end and closed-end mutual funds, iShares exchange-traded funds (ETFs), separate accounts, collective investment funds and other pooled investment vehicles. It offers its Aladdin investment system, as well as risk management, outsourcing, advisory and technology services, to institutional investors and wealth management intermediaries under the BlackRock Solutions name.

About Garrison Capital

Garrison Capital Inc. is a managed, closed-end, non-diversified management investment company. The Company’s investment objective is to generate current income and capital appreciation by making investments primarily in debt securities and loans of the United States-based middle-market companies, which it defines as those having annual earnings before interest, taxes and depreciation, or EBITDA, of certain amount. It invests or provides direct lending in first lien senior secured loans, second lien senior secured loans, one-stop senior secured loans or unitranche loans, subordinated or mezzanine loans, unsecured consumer loans and to a lesser extent, selected equity co-investments in middle-market companies. The Company intends to generate risk-adjusted net returns by assembling a portfolio of investments. The Company’s investment advisor is Garrison Capital Advisers LLC.

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