Pharma Bio Serv (OTCMKTS:PBSV) and Blackrock Capital Investment (NASDAQ:BKCC) are both small-cap business services companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, analyst recommendations, valuation, institutional ownership, earnings, profitability and risk.

Earnings and Valuation

This table compares Pharma Bio Serv and Blackrock Capital Investment’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Pharma Bio Serv $15.58 million 1.73 -$1.41 million ($0.06) -19.17
Blackrock Capital Investment $97.33 million 4.13 $20.90 million $0.73 7.90

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

Institutional and Insider Ownership

34.1% of Blackrock Capital Investment shares are held by institutional investors. 51.6% of Pharma Bio Serv shares are held by insiders. Comparatively, 1.3% of Blackrock Capital Investment 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.

Risk & Volatility

Pharma Bio Serv has a beta of 0.04, indicating that its stock price is 96% less volatile than the S&P 500. Comparatively, Blackrock Capital Investment has a beta of 0.63, indicating that its stock price is 37% less volatile than the S&P 500.

Profitability

This table compares Pharma Bio Serv and Blackrock Capital Investment’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Pharma Bio Serv -14.93% 0.49% 0.41%
Blackrock Capital Investment 30.39% 9.10% 6.11%

Analyst Ratings

This is a breakdown of current ratings and price targets for Pharma Bio Serv and Blackrock Capital Investment, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Pharma Bio Serv 0 0 0 0 N/A
Blackrock Capital Investment 0 2 0 0 2.00

Blackrock Capital Investment has a consensus price target of $6.00, suggesting a potential upside of 3.99%. Given Blackrock Capital Investment’s higher possible upside, analysts clearly believe Blackrock Capital Investment is more favorable than Pharma Bio Serv.

Dividends

Pharma Bio Serv pays an annual dividend of $0.08 per share and has a dividend yield of 7.0%. Blackrock Capital Investment pays an annual dividend of $0.72 per share and has a dividend yield of 12.5%. Pharma Bio Serv pays out -133.3% of its earnings in the form of a dividend. Blackrock Capital Investment pays out 98.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

Blackrock Capital Investment beats Pharma Bio Serv on 12 of the 14 factors compared between the two stocks.

About Pharma Bio Serv

Pharma-Bio Serv, Inc. operates as a compliance and technology transfer services consulting firm with a laboratory testing facility in Puerto Rico, the United States, Europe, and Brazil markets. It provides compliance consulting services to the pharmaceutical, chemical, biotechnology, medical device, cosmetic, food industries, and allied products in Puerto Rico, the United States, Europe, and Brazil. The company's technical consulting services comprise regulatory compliance, validation, technology transfer, engineering, project management, and process support. It also offers microbiological and chemical testing services through its lab; and technical trainings/seminars. The company markets its services through industry trade shows, professional conventions, industry publications, and seminars. Pharma-Bio Serv, Inc. was founded in 1993 and is headquartered in Dorado, Puerto Rico.

About Blackrock Capital Investment

BlackRock Capital Investment Corporation, formerly known as BlackRock Kelso Capital Corporation, is a Business Development Company specializing in investments in middle market companies. The fund invests in all industries. It prefers to invest between $10 million and $50 million and can invest more or less in companies with EBITDA or operating cash flow between $10 million and $50 million. The fund invests in the form of senior and junior secured, unsecured, and subordinated debt securities and loans including cash flow, asset backed, and junior lien facilities and equity securities. It's equity investments can be structured in the form of warrants, preferred stock, common equity co-investments, and direct investments in common stock. The fund's debt investments are principally structured to provide for current cash interest and to a lesser extent non-cash interest, particularly with subordinated debt investments, through a pay-in-kind (PIK) feature. It can also make non-control investments.

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