Analyzing Blackrock Tcp Capital (NASDAQ:TCPC) and SLR Investment (NASDAQ:SLRC)

SLR Investment (NASDAQ:SLRC) and Blackrock Tcp Capital (NASDAQ:TCPC) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, valuation, analyst recommendations, institutional ownership, profitability, risk and earnings.

Profitability

This table compares SLR Investment and Blackrock Tcp Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SLR Investment	41.00%	8.98%	3.56%
Blackrock Tcp Capital	-4.20%	15.27%	6.15%

Analyst Ratings

This is a summary of recent ratings and target prices for SLR Investment and Blackrock Tcp Capital, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SLR Investment	2	3	2	1	2.25
Blackrock Tcp Capital	2	1	0	0	1.33

SLR Investment currently has a consensus price target of $16.04, indicating a potential upside of 2.27%. Blackrock Tcp Capital has a consensus price target of $6.50, indicating a potential upside of 7.08%. Given Blackrock Tcp Capital’s higher possible upside, analysts plainly believe Blackrock Tcp Capital is more favorable than SLR Investment.

Institutional and Insider Ownership

35.3% of SLR Investment shares are held by institutional investors. 8.8% of SLR Investment shares are held by insiders. Comparatively, 0.2% of Blackrock Tcp Capital shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Dividends

SLR Investment pays an annual dividend of $1.64 per share and has a dividend yield of 10.5%. Blackrock Tcp Capital pays an annual dividend of $1.00 per share and has a dividend yield of 16.5%. SLR Investment pays out 99.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Blackrock Tcp Capital pays out -769.2% of its earnings in the form of a dividend. Blackrock Tcp Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings & Valuation

This table compares SLR Investment and Blackrock Tcp Capital”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SLR Investment	$232.43 million	N/A	$95.76 million	$1.65	9.50
Blackrock Tcp Capital	$4.60 million	111.96	-$63.14 million	($0.13)	-46.69

SLR Investment has higher revenue and earnings than Blackrock Tcp Capital. Blackrock Tcp Capital is trading at a lower price-to-earnings ratio than SLR Investment, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

SLR Investment has a beta of 0.7, meaning that its share price is 30% less volatile than the S&P 500. Comparatively, Blackrock Tcp Capital has a beta of 0.87, meaning that its share price is 13% less volatile than the S&P 500.

Summary

SLR Investment beats Blackrock Tcp Capital on 10 of the 16 factors compared between the two stocks.

About SLR Investment

SLR Investment Corp. is a business development company specializing in secured debt (first lien unitranche and second lien), subordinated (unsecured) debt, minority equity, leveraged buyouts, acquisitions, recapitalizations, general refinancing, growth capital and strategic income-oriented control equity investments in leveraged middle market companies. The fund invests in aerospace and defense; air freight & logistics; asset management; automotive; banking; beverage, food and tobacco; building products; buildings and real estate; broadcasting and entertainment; cargo transport; commercial services and supplies; communications equipment; chemicals, plastics and rubber; containers, packaging and glass; construction & engineering; diversified/conglomerate manufacturing; consumer Finance; distributors; diversified/conglomerate services; diversified financial services; diversified real estate activities; food products; Footwear; Education Services; diversified telecommunications services; electronics; farming and agriculture; finance; grocery; health care equipment and supplies; health care facilities; education and childcare; home and office furnishing, durable consumer products; hotels, motels, inns and gaming; insurance; restaurants, leisure, amusement, and entertainment; leisure equipment tolls and services, media, multiline retail, multi sector holdings; paper and forest products; personal products; professional services, research and consulting services, software; specialty retail; textiles apparel and luxury goods, thrifts and mortgage finance, trading companies and distributors, utilities, and wireless telecommunication services; industrial conglomerates; internet software and services, IT services, machinery; mining, steel, iron, and non-precious metals; oil and gas; personal, food and miscellaneous services; printing and publishing; retail stores; telecommunications; textiles and leather; and utilities. It also invests in life sciences with focus on specialty pharmaceuticals, medical devices, biotech, health Care Providers and services; health Care technology, enabling technologies and tools. The fund primarily invests in United States. The fund’s investments generally range between $5 million and $100 million. The fund invests in companies with revenues between $50 million and $1 billion and EBITDA between $15 million and $100 million. It invests in the form of senior secured loans, mezzanine loans, and equity securities. It may also seek investments in thinly traded public companies and also make secondary investments. The fund makes non-control equity investments. It primarily exits within three years of the initial capital commitment.

About Blackrock Tcp Capital

BlackRock TCP Capital Corp. is a business development company specializing in direct equity and debt investments in middle-market, small businesses, debt securities, senior secured loans, junior loans, originated loans, mezzanine, senior debt instruments, bonds, and secondary-market investments. It typically invests in communication services, public relations services, television, wireless telecommunication services, apparel, textile mills, restaurants, retailing, energy, oil and gas extraction, Patent owners and Lessors, Federal and Federally- Sponsored Credit agencies, insurance, hospital and healthcare centers, Biotechnology, engineering services, heavy electrical equipment, tax accounting, scientific and related consulting services, charter freight air transportation, Information technology consulting, application hosting services, software diagram and design, computer aided design, communication equipment, electronics manufacturing equipment, computer components, chemicals. It seeks to invest in the United States. The fund typically invests between $10 million and $35 million in companies with enterprise values between $100 million and $1500 million including complex situations. It prefers to make equity investments in companies for an ownership stake.