Victory Capital (NASDAQ:VCTR) and Barings BDC (NYSE:BBDC) are both small-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, earnings, profitability, valuation, risk, analyst recommendations and institutional ownership.

Valuation and Earnings

This table compares Victory Capital and Barings BDC’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Victory Capital $413.41 million 2.50 $63.70 million $1.46 10.51
Barings BDC $80.22 million 6.31 -$114.28 million N/A N/A

Victory Capital has higher revenue and earnings than Barings BDC.

Dividends

Barings BDC pays an annual dividend of $0.48 per share and has a dividend yield of 4.9%. Victory Capital does not pay a dividend.

Profitability

This table compares Victory Capital and Barings BDC’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Victory Capital 15.41% 24.19% 13.17%
Barings BDC -142.45% -0.01% N/A

Insider and Institutional Ownership

14.0% of Victory Capital shares are owned by institutional investors. Comparatively, 66.0% of Barings BDC shares are owned by institutional investors. 10.2% of Victory Capital shares are owned by insiders. Comparatively, 0.3% of Barings BDC shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Victory Capital and Barings BDC, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Victory Capital 0 1 7 0 2.88
Barings BDC 0 0 4 0 3.00

Victory Capital currently has a consensus price target of $14.50, indicating a potential downside of 5.48%. Barings BDC has a consensus price target of $11.20, indicating a potential upside of 13.51%. Given Barings BDC’s stronger consensus rating and higher possible upside, analysts plainly believe Barings BDC is more favorable than Victory Capital.

Risk & Volatility

Victory Capital has a beta of 2.03, meaning that its share price is 103% more volatile than the S&P 500. Comparatively, Barings BDC has a beta of 0.79, meaning that its share price is 21% less volatile than the S&P 500.

Summary

Victory Capital beats Barings BDC on 8 of the 14 factors compared between the two stocks.

Victory Capital Company Profile

Victory Capital Holdings, Inc., together with its subsidiaries, operates as an independent investment management company in the United States. It offers investment advisory, fund administration, and distribution services through broker-dealers, retirement platforms, and registered investment advisor networks. As of September 30, 2017, its franchises and solutions platform managed a set of 70 investment strategies for a range of institutional and retail clients. The company was founded in 2013 and is headquartered in Brooklyn, Ohio.

Barings BDC Company Profile

Barings BDC, Inc. (NYSE:BBDC) is a business development company specializing in private equity and mezzanine investments. It focuses on leveraged buyouts, management buyouts, ESOPs, change of control transactions, acquisition financings, growth financing, and recapitalizations in lower middle market, mature, and later stage companies. The firm prefers to make investments in many business sectors including manufacturing, distribution, transportation, energy, communications, health services, restaurants, media, and others. It primarily invests in companies located throughout the United States, with an emphasis on the Southeast and Midatlantic. The firm makes equity investments between $1 million and $25 million and debt investments between $5 million and $30 million per transaction, in companies having annual revenues between $20 million and $200 million and EBITDA between $3 million and $35 million and can also co-invest. It typically makes investments between $5 million and $35 million. It primarily invests in senior subordinated debt securities secured by second lien security interests in portfolio company assets, coupled with equity interests. The firm also invests in senior debt securities secured by first lien security interests in portfolio companies. Triangle Capital Corporation was incorporated on October 10, 2006 and is based in Raleigh, North Carolina.

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