TCG BDC (NASDAQ: CGBD) and INTL Fcstone (NASDAQ:INTL) are both small-cap financials companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, profitability, earnings, risk, analyst recommendations, institutional ownership and dividends.

Analyst Ratings

This is a summary of current ratings and target prices for TCG BDC and INTL Fcstone, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TCG BDC 0 0 4 0 3.00
INTL Fcstone 0 0 0 0 N/A

TCG BDC presently has a consensus price target of $19.13, indicating a potential upside of 3.83%. Given TCG BDC’s higher probable upside, research analysts clearly believe TCG BDC is more favorable than INTL Fcstone.

Valuation and Earnings

This table compares TCG BDC and INTL Fcstone’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
TCG BDC $110.97 million 10.33 $69.80 million $1.56 11.81
INTL Fcstone $29.42 billion 0.03 $6.40 million $0.33 131.00

TCG BDC has higher earnings, but lower revenue than INTL Fcstone. TCG BDC is trading at a lower price-to-earnings ratio than INTL Fcstone, indicating that it is currently the more affordable of the two stocks.

Dividends

TCG BDC pays an annual dividend of $1.48 per share and has a dividend yield of 8.0%. INTL Fcstone does not pay a dividend. TCG BDC pays out 94.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Institutional and Insider Ownership

9.1% of TCG BDC shares are owned by institutional investors. Comparatively, 65.0% of INTL Fcstone shares are owned by institutional investors. 0.1% of TCG BDC shares are owned by company insiders. Comparatively, 20.5% of INTL Fcstone shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares TCG BDC and INTL Fcstone’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
TCG BDC 50.18% 8.82% 4.94%
INTL Fcstone 0.02% 1.41% 0.10%

Summary

TCG BDC beats INTL Fcstone on 9 of the 14 factors compared between the two stocks.

TCG BDC Company Profile

TCG BDC, Inc., formerly Carlyle GMS Finance, Inc., is a managed and non-diversified closed-end investment company. The Company is focused on lending to middle market companies. The Company’s investment objective is to generate current income and capital appreciation primarily through debt investments in the United States and middle market companies. The Company seeks to achieve its investment objective primarily through direct originations of secured debt, including first lien senior secured loans and second lien senior secured loans. The Company’s first lien senior secured loans include stand-alone first lien loans, first lien/last out loans, and unitranche loans. Second lien senior secured loans (Middle Market Senior Loans), with the balance of its assets invested yielding in higher investments include unsecured debt, mezzanine debt and investments in equities. The Company’s investment adviser is Carlyle GMS Investment Management L.L.C.

INTL Fcstone Company Profile

INTL Fcstone Inc. is a financial services company. The Company provides financial products, and advisory and execution service. The Company operates through five segments: Commercial Hedging, Global Payments, Securities, Physical Commodities, and Clearing and Execution Services (CES). The Commercial Hedging segment serves its commercial clients through its team of risk management consultants. The Global Payments segment provides global payment solutions to banks and commercial businesses, as well as charities and non-governmental organizations and government organizations. The Securities segment provides solutions that facilitate cross-border trading. The Physical Commodities segment consists of its physical precious metals trading and physical agricultural and energy commodity businesses. The CES segment seeks to provide clearing and execution of exchange-traded futures and options for the institutional and trader market segments.

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