Golub Capital BDC (GBDC) versus Capitala Finance (CPTA) Head to Head Survey
Capitala Finance (NASDAQ: CPTA) and Golub Capital BDC (NASDAQ:GBDC) are both small-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, earnings, analyst recommendations, profitability, institutional ownership, valuation and risk.
Capitala Finance pays an annual dividend of $1.00 per share and has a dividend yield of 13.7%. Golub Capital BDC pays an annual dividend of $0.96 per share and has a dividend yield of 5.3%. Capitala Finance pays out -227.3% of its earnings in the form of a dividend. Golub Capital BDC pays out 67.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Capitala Finance is clearly the better dividend stock, given its higher yield and lower payout ratio.
This table compares Capitala Finance and Golub Capital BDC’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Capitala Finance||$51.09 million||2.28||$9.15 million||($0.44)||-16.57|
|Golub Capital BDC||$137.76 million||7.81||$82.28 million||$1.43||12.59|
Golub Capital BDC has higher revenue and earnings than Capitala Finance. Capitala Finance is trading at a lower price-to-earnings ratio than Golub Capital BDC, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
17.5% of Capitala Finance shares are held by institutional investors. Comparatively, 38.3% of Golub Capital BDC shares are held by institutional investors. 8.4% of Capitala Finance shares are held by company insiders. Comparatively, 2.4% of Golub Capital BDC shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Volatility and Risk
Capitala Finance has a beta of 1.07, indicating that its stock price is 7% more volatile than the S&P 500. Comparatively, Golub Capital BDC has a beta of 0.64, indicating that its stock price is 36% less volatile than the S&P 500.
This is a breakdown of current recommendations for Capitala Finance and Golub Capital BDC, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Golub Capital BDC||0||2||1||0||2.33|
Capitala Finance currently has a consensus target price of $13.50, indicating a potential upside of 85.19%. Golub Capital BDC has a consensus target price of $20.17, indicating a potential upside of 11.97%. Given Capitala Finance’s higher probable upside, research analysts clearly believe Capitala Finance is more favorable than Golub Capital BDC.
This table compares Capitala Finance and Golub Capital BDC’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Golub Capital BDC||58.64%||7.94%||4.16%|
Golub Capital BDC beats Capitala Finance on 10 of the 15 factors compared between the two stocks.
Capitala Finance Company Profile
Capitala Finance Corp. is an externally managed non-diversified, closed-end management investment company. The Company’s investment objective is to generate both current income and capital appreciation through debt and equity investments. Both directly and through its subsidiaries that are licensed by the United States Small Business Administration (SBA), the Company offers financing to business owners, management teams and financial sponsors for change of ownership transactions, recapitalizations, strategic acquisitions, business expansion and other growth initiatives. The Company provides capital to lower and traditional middle-market companies in the United States, with a non-exclusive emphasis on the Southeast, Southwest and Mid-Atlantic regions. The Company invests in first lien, second lien and subordinated loans. The Company’s investment advisor is Capitala Investment Advisors, LLC.
Golub Capital BDC Company Profile
Golub Capital BDC, Inc. is an externally managed, non-diversified, closed-end, management investment company. The Company’s investment objective is to generate current income and capital appreciation by investing primarily in senior secured and one stop loans of the United States middle-market companies. It may also selectively invest in second lien and subordinated loans of, and warrants and minority equity securities in the United States middle-market companies. The Company seeks to create a portfolio that includes primarily senior secured and one stop loans by primarily investing in the securities of the United States middle-market companies. It generally invests in securities that have been rated below investment grade by independent rating agencies or that would be rated below investment grade if they were rated. The Company’s investment activities are managed by its investment advisor, GC Advisors LLC (GC Advisors).
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