Critical Review: Golub Capital BDC (GBDC) versus Blackrock Taxable Municipal Bond Trust (BBN)
Golub Capital BDC (NASDAQ: GBDC) and Blackrock Taxable Municipal Bond Trust (NYSE:BBN) are both small-cap financials companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, institutional ownership, earnings, risk, dividends and valuation.
Volatility & Risk
Golub Capital BDC has a beta of 0.65, suggesting that its share price is 35% less volatile than the S&P 500. Comparatively, Blackrock Taxable Municipal Bond Trust has a beta of -0.06, suggesting that its share price is 106% less volatile than the S&P 500.
This is a breakdown of recent ratings and target prices for Golub Capital BDC and Blackrock Taxable Municipal Bond Trust, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Golub Capital BDC||0||3||0||0||2.00|
|Blackrock Taxable Municipal Bond Trust||0||0||0||0||N/A|
Golub Capital BDC currently has a consensus target price of $19.50, indicating a potential upside of 9.06%. Given Golub Capital BDC’s higher probable upside, analysts clearly believe Golub Capital BDC is more favorable than Blackrock Taxable Municipal Bond Trust.
Golub Capital BDC pays an annual dividend of $0.96 per share and has a dividend yield of 5.4%. Blackrock Taxable Municipal Bond Trust does not pay a dividend. Golub Capital BDC pays out 66.2% of its earnings in the form of a dividend.
Insider and Institutional Ownership
40.4% of Golub Capital BDC shares are owned by institutional investors. 2.4% of Golub Capital BDC 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.
Valuation & Earnings
This table compares Golub Capital BDC and Blackrock Taxable Municipal Bond Trust’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Golub Capital BDC||$137.76 million||7.73||$82.28 million||$1.45||12.33|
|Blackrock Taxable Municipal Bond Trust||N/A||N/A||N/A||N/A||N/A|
Golub Capital BDC has higher revenue and earnings than Blackrock Taxable Municipal Bond Trust.
This table compares Golub Capital BDC and Blackrock Taxable Municipal Bond Trust’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Golub Capital BDC||58.06%||7.90%||4.06%|
|Blackrock Taxable Municipal Bond Trust||N/A||N/A||N/A|
Golub Capital BDC beats Blackrock Taxable Municipal Bond Trust on 9 of the 10 factors compared between the two stocks.
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).
Blackrock Taxable Municipal Bond Trust Company Profile
BlackRock Taxable Municipal Bond Trust (the Trust) is a non-diversified, closed-end management investment company. The Trust’s investment objective is to seek high current income, with a secondary objective of capital appreciation. The Trust seeks to achieve its investment objectives by investing primarily in a portfolio of taxable municipal securities, including Build America Bonds (BABs), issued by state and local governments to finance capital projects, such as public schools, roads, transportation infrastructure, bridges, ports and public buildings. It also has the ability to invest up to 20% of its managed assets in securities other than taxable municipal securities. It may invest at least 80% of its managed assets in securities that at the time of purchase are investment-grade quality. It invests in various sectors, including utilities, transportation, education, tobacco, commercial services and supplies, and housing. The Trust’s investment manager is BlackRock Advisors, LLC.
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