Head to Head Comparison: PennantPark Floating Rate Capital (NYSE:PFLT) versus BlackRock Science and Technology Term Trust (NASDAQ:BSTZ)

BlackRock Science and Technology Term Trust (NASDAQ:BSTZ) and PennantPark Floating Rate Capital (NYSE:PFLT) are both financial services companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, profitability, dividends, valuation, analyst recommendations, risk and earnings.

Institutional and Insider Ownership

19.8% of PennantPark Floating Rate Capital shares are held by institutional investors. 1.0% of PennantPark Floating Rate Capital 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.

Analyst Ratings

This is a breakdown of current recommendations and price targets for BlackRock Science and Technology Term Trust and PennantPark Floating Rate Capital, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BlackRock Science and Technology Term Trust	0	0	0	0	0.00
PennantPark Floating Rate Capital	0	1	1	0	2.50

PennantPark Floating Rate Capital has a consensus target price of $10.50, indicating a potential upside of 9.95%. Given PennantPark Floating Rate Capital’s stronger consensus rating and higher possible upside, analysts plainly believe PennantPark Floating Rate Capital is more favorable than BlackRock Science and Technology Term Trust.

Dividends

BlackRock Science and Technology Term Trust pays an annual dividend of $2.40 per share and has a dividend yield of 10.5%. PennantPark Floating Rate Capital pays an annual dividend of $1.23 per share and has a dividend yield of 12.9%. PennantPark Floating Rate Capital pays out 168.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares BlackRock Science and Technology Term Trust and PennantPark Floating Rate Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
BlackRock Science and Technology Term Trust	N/A	N/A	N/A
PennantPark Floating Rate Capital	25.39%	9.91%	4.05%

Valuation and Earnings

This table compares BlackRock Science and Technology Term Trust and PennantPark Floating Rate Capital”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BlackRock Science and Technology Term Trust	$136.60 million	N/A	N/A	N/A	N/A
PennantPark Floating Rate Capital	$78.29 million	12.10	$66.36 million	$0.73	13.08

PennantPark Floating Rate Capital has lower revenue, but higher earnings than BlackRock Science and Technology Term Trust.

Summary

PennantPark Floating Rate Capital beats BlackRock Science and Technology Term Trust on 9 of the 11 factors compared between the two stocks.

About BlackRock Science and Technology Term Trust

BlackRock Science and Technology Term Trust is a closed-ended equity mutual fund launched by BlackRock, Inc. The fund is managed by BlackRock Advisors, LLC. It invests in public equity markets across the globe. The fund seeks to invest in stocks of companies operating in the science and technology sectors. It primarily invests in growth stocks of companies across all market capitalizations. BlackRock Science and Technology Term Trust was formed in June 2019 and is domiciled in the United States.

About PennantPark Floating Rate Capital

PennantPark Floating Rate Capital Ltd. is a business development company. It seeks to make secondary direct, debt, equity, and loan investments. The fund seeks to invest through floating rate loans in private or thinly traded or small market-cap, public middle market companies. It primarily invests in the United States and to a limited extent non-U.S. companies. The fund typically invests between $2 million and $20 million. The fund also invests in equity securities, such as preferred stock, common stock, warrants or options received in connection with debt investments or through direct investments. It primarily invests between $10 million and $50 million in investments in senior secured loans and mezzanine debt. It seeks to invest in companies not rated by national rating agencies. The companies if rated would be between BB and CCC under the Standard & Poor’s system. The fund invests 30% is invested in non-qualifying assets like investments in public companies whose securities are not thinly traded or do not have a market capitalization of less than $250 million, securities of middle-market companies located outside of the United States, high-yield bonds, distressed debt, private equity, securities of public companies that are not thinly traded, and investment companies as defined in the 1940 Act. Under normal conditions, the fund expects atleast 80 percent of its net assets plus any borrowings for investment purposes to be invested in Floating Rate Loans and investments with similar economic characteristics, including cash equivalents invested in money market funds. It expects to represent 65 percent of its portfolio through senior secured loans. In case of floating rate loans, it holds investments for a period of three to ten years.