Critical Comparison: Nuveen Churchill Direct Lending (NYSE:NCDL) and Goldman Sachs BDC (NYSE:GSBD)

Nuveen Churchill Direct Lending (NYSE:NCDL) and Goldman Sachs BDC (NYSE:GSBD) are both small-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their valuation, institutional ownership, profitability, analyst recommendations, earnings, dividends and risk.

Profitability

This table compares Nuveen Churchill Direct Lending and Goldman Sachs BDC’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Nuveen Churchill Direct Lending	36.83%	11.13%	4.83%
Goldman Sachs BDC	34.72%	12.78%	5.60%

Volatility & Risk

Nuveen Churchill Direct Lending has a beta of 0.4, meaning that its stock price is 60% less volatile than the S&P 500. Comparatively, Goldman Sachs BDC has a beta of 0.63, meaning that its stock price is 37% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and price targets for Nuveen Churchill Direct Lending and Goldman Sachs BDC, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nuveen Churchill Direct Lending	1	3	1	0	2.00
Goldman Sachs BDC	2	3	0	0	1.60

Nuveen Churchill Direct Lending presently has a consensus target price of $15.75, indicating a potential upside of 16.55%. Goldman Sachs BDC has a consensus target price of $9.75, indicating a potential upside of 6.38%. Given Nuveen Churchill Direct Lending’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Nuveen Churchill Direct Lending is more favorable than Goldman Sachs BDC.

Institutional and Insider Ownership

28.7% of Goldman Sachs BDC shares are owned by institutional investors. 0.6% of Nuveen Churchill Direct Lending shares are owned by insiders. Comparatively, 0.1% of Goldman Sachs BDC shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

Nuveen Churchill Direct Lending pays an annual dividend of $1.80 per share and has a dividend yield of 13.3%. Goldman Sachs BDC pays an annual dividend of $1.28 per share and has a dividend yield of 14.0%. Nuveen Churchill Direct Lending pays out 117.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Goldman Sachs BDC pays out 110.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Goldman Sachs BDC is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings and Valuation

This table compares Nuveen Churchill Direct Lending and Goldman Sachs BDC”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nuveen Churchill Direct Lending	$86.00 million	7.76	$116.32 million	$1.53	8.83
Goldman Sachs BDC	$147.47 million	7.09	$62.87 million	$1.16	7.90

Nuveen Churchill Direct Lending has higher earnings, but lower revenue than Goldman Sachs BDC. Goldman Sachs BDC is trading at a lower price-to-earnings ratio than Nuveen Churchill Direct Lending, indicating that it is currently the more affordable of the two stocks.

Summary

Nuveen Churchill Direct Lending beats Goldman Sachs BDC on 9 of the 16 factors compared between the two stocks.

About Nuveen Churchill Direct Lending

Nuveen Churchill Direct Lending Corp. is a specialty finance company focused primarily on investing in senior secured loans to private equity-owned U.S. middle market companies. It has elected to be regulated as a business development company. Nuveen Churchill Direct Lending Corp. is based in NEW YORK.

About Goldman Sachs BDC

Goldman Sachs BDC, Inc. is a business development company specializing in middle market and mezzanine investment in private companies. It seeks to make capital appreciation through direct originations of secured debt, senior secured debt, junior secured debt, including first lien, first lien/last-out unitranche and second lien debt, unsecured debt, including mezzanine debt and, to a lesser extent, investments in equities. The fund primarily invests in United States. It seeks to invest between $10 million and $75 million in companies with EBITDA between $5 million and $75 million annually.