Goldman Sachs BDC (NYSE:GSBD) versus TriplePoint Venture Growth BDC (NYSE:TPVG) Critical Review

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

Earnings & Valuation

This table compares TriplePoint Venture Growth BDC and Goldman Sachs BDC”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TriplePoint Venture Growth BDC	$108.65 million	2.20	$32.05 million	$0.85	6.96
Goldman Sachs BDC	$147.47 million	7.17	$62.87 million	$1.16	7.99

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

Analyst Recommendations

This is a summary of recent ratings and recommmendations for TriplePoint Venture Growth BDC and Goldman Sachs BDC, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TriplePoint Venture Growth BDC	2	5	0	0	1.71
Goldman Sachs BDC	2	3	0	0	1.60

TriplePoint Venture Growth BDC presently has a consensus target price of $6.25, indicating a potential upside of 5.68%. Goldman Sachs BDC has a consensus target price of $9.75, indicating a potential upside of 5.23%. Given TriplePoint Venture Growth BDC’s stronger consensus rating and higher possible upside, analysts clearly believe TriplePoint Venture Growth BDC is more favorable than Goldman Sachs BDC.

Institutional and Insider Ownership

12.8% of TriplePoint Venture Growth BDC shares are owned by institutional investors. Comparatively, 28.7% of Goldman Sachs BDC shares are owned by institutional investors. 1.5% of TriplePoint Venture Growth BDC shares are owned by insiders. Comparatively, 0.1% of Goldman Sachs BDC shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares TriplePoint Venture Growth BDC and Goldman Sachs BDC’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TriplePoint Venture Growth BDC	36.02%	12.88%	5.76%
Goldman Sachs BDC	34.72%	12.78%	5.60%

Volatility & Risk

TriplePoint Venture Growth BDC has a beta of 1.36, suggesting that its share price is 36% more volatile than the S&P 500. Comparatively, Goldman Sachs BDC has a beta of 0.63, suggesting that its share price is 37% less volatile than the S&P 500.

Dividends

TriplePoint Venture Growth BDC pays an annual dividend of $0.92 per share and has a dividend yield of 15.6%. Goldman Sachs BDC pays an annual dividend of $1.28 per share and has a dividend yield of 13.8%. TriplePoint Venture Growth BDC pays out 108.2% 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. TriplePoint Venture Growth BDC is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

TriplePoint Venture Growth BDC beats Goldman Sachs BDC on 9 of the 15 factors compared between the two stocks.

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.

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.