Palmer Square Capital BDC (NYSE:PSBD) and Amalgamated Financial (NASDAQ:AMAL) Critical Contrast

Amalgamated Financial (NASDAQ:AMAL) and Palmer Square Capital BDC (NYSE:PSBD) are both small-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, earnings, profitability, analyst recommendations, institutional ownership, valuation and dividends.

Analyst Ratings

This is a summary of recent ratings and price targets for Amalgamated Financial and Palmer Square Capital BDC, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Amalgamated Financial	1	1	1	0	2.00
Palmer Square Capital BDC	0	3	1	0	2.25

Amalgamated Financial presently has a consensus target price of $33.00, suggesting a potential upside of 19.35%. Palmer Square Capital BDC has a consensus target price of $13.63, suggesting a potential upside of 11.27%. Given Amalgamated Financial’s higher possible upside, analysts clearly believe Amalgamated Financial is more favorable than Palmer Square Capital BDC.

Valuation & Earnings

This table compares Amalgamated Financial and Palmer Square Capital BDC”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Amalgamated Financial	$434.51 million	1.92	$106.43 million	$3.32	8.33
Palmer Square Capital BDC	$143.51 million	2.74	$47.67 million	$0.56	21.87

Amalgamated Financial has higher revenue and earnings than Palmer Square Capital BDC. Amalgamated Financial is trading at a lower price-to-earnings ratio than Palmer Square Capital BDC, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Amalgamated Financial and Palmer Square Capital BDC’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Amalgamated Financial	22.97%	14.97%	1.31%
Palmer Square Capital BDC	13.51%	10.91%	4.15%

Institutional & Insider Ownership

75.9% of Amalgamated Financial shares are held by institutional investors. Comparatively, 6.5% of Palmer Square Capital BDC shares are held by institutional investors. 1.3% of Amalgamated Financial shares are held by insiders. Comparatively, 1.0% of Palmer Square Capital BDC shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Dividends

Amalgamated Financial pays an annual dividend of $0.56 per share and has a dividend yield of 2.0%. Palmer Square Capital BDC pays an annual dividend of $1.44 per share and has a dividend yield of 11.8%. Amalgamated Financial pays out 16.9% of its earnings in the form of a dividend. Palmer Square Capital BDC pays out 257.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Amalgamated Financial has increased its dividend for 4 consecutive years.

Risk and Volatility

Amalgamated Financial has a beta of 0.86, meaning that its stock price is 14% less volatile than the S&P 500. Comparatively, Palmer Square Capital BDC has a beta of 0.71, meaning that its stock price is 29% less volatile than the S&P 500.

Summary

Amalgamated Financial beats Palmer Square Capital BDC on 11 of the 16 factors compared between the two stocks.

About Amalgamated Financial

Amalgamated Financial Corp. operates as the bank holding company for Amalgamated Bank that provides commercial and retail banking, investment management, and trust and custody services for commercial and retail customers in the United States. The company accepts various deposit products, including non-interest bearing accounts, interest-bearing demand products, savings accounts, money market accounts, NOW accounts, and certificates of deposit. It also provides various commercial loans comprising commercial and industrial, multifamily mortgage, and commercial real estate loans; residential mortgage loans; and retail loans, such as residential real estate, consumer solar, and consumer and other loans. In addition, the company offers online banking, bill payment, online cash management, and safe deposit box rental services; debit and ATM cards; and trust, custody, and investment management services comprising asset safekeeping, corporate actions, income collections, proxy, account transition, asset transfers, and conversion management services. Further, it provides investment products, such as funds spanning equity, fixed-income, real estate, and alternative investment products; and brokerage, asset management, and insurance products. Amalgamated Financial Corp. was founded in 1923 and is headquartered in New York, New York.

About Palmer Square Capital BDC

Palmer Square Capital BDC Inc. is an externally managed, non-diversified closed-end management investment company which primarily lends to and invests in corporate debt securities, including small to large private U.S. companies and has elected to be regulated as a business development company. Palmer Square Capital BDC Inc. is based in MISSION WOODS, Kan.