Netcapital (NASDAQ:NCPL – Get Free Report) and Carlyle Secured Lending (NASDAQ:CGBD – Get Free Report) are both small-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, earnings, risk, analyst recommendations, profitability, dividends and valuation.
Risk & Volatility
Netcapital has a beta of 2.35, suggesting that its share price is 135% more volatile than the S&P 500. Comparatively, Carlyle Secured Lending has a beta of 0.66, suggesting that its share price is 34% less volatile than the S&P 500.
Profitability
This table compares Netcapital and Carlyle Secured Lending’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Netcapital | -3,806.77% | -40.53% | -32.59% |
| Carlyle Secured Lending | 14.26% | 8.85% | 3.90% |
Analyst Recommendations
This is a summary of current recommendations and price targets for Netcapital and Carlyle Secured Lending, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Netcapital | 1 | 0 | 0 | 0 | 1.00 |
| Carlyle Secured Lending | 0 | 4 | 1 | 1 | 2.50 |
Carlyle Secured Lending has a consensus price target of $11.33, indicating a potential upside of 9.08%. Given Carlyle Secured Lending’s stronger consensus rating and higher probable upside, analysts plainly believe Carlyle Secured Lending is more favorable than Netcapital.
Valuation and Earnings
This table compares Netcapital and Carlyle Secured Lending”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Netcapital | $870,000.00 | 19.58 | -$28.30 million | ($15.49) | -0.14 |
| Carlyle Secured Lending | $255.57 million | 2.80 | $69.97 million | $0.51 | 20.37 |
Carlyle Secured Lending has higher revenue and earnings than Netcapital. Netcapital 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.
Insider & Institutional Ownership
30.7% of Netcapital shares are held by institutional investors. Comparatively, 24.5% of Carlyle Secured Lending shares are held by institutional investors. 4.9% of Netcapital shares are held by insiders. Comparatively, 0.3% of Carlyle Secured Lending shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Summary
Carlyle Secured Lending beats Netcapital on 10 of the 14 factors compared between the two stocks.
About Netcapital
Netcapital Inc. operates as a fintech company. It offers Netcapital.com, an SEC-registered funding portal that enables private companies to raise capital online, as well as allows investors to invest from anywhere in the world. The company also provides various services, including automated onboarding process and filing of required regulatory documents; compliance review; custom-built offering page on its portal website; third party transfer agent and custodial services; and rolling closes which provides access to liquidity before final close date of offerings, as well as assistance with annual fillings and direct access to team for ongoing support. In addition, it offers advisor services, which includes incubation of technology start-ups; investors introduction; online marketing; website design and software development; message crafting including pitch decks, offering pages, and ad creation; strategic advice; and technology consulting services. Further, the company provides valuation services, such as business valuation, fairness and solvency opinions, ESOP feasibility and valuation, non-cash charitable contribution, economic analysis of damages, intellectual property appraisals, and compensation studies. Netcapital Inc. is based in Boston, Massachusetts.
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.
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