Goldman Sachs BDC (NYSE:GSBD) and Rand Capital (NASDAQ:RAND) Financial Survey

Goldman Sachs BDC (NYSE:GSBD) and Rand Capital (NASDAQ:RAND) are both small-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, risk, profitability, dividends, valuation and earnings.

Dividends

Goldman Sachs BDC pays an annual dividend of $1.28 per share and has a dividend yield of 13.5%. Rand Capital pays an annual dividend of $1.16 per share and has a dividend yield of 10.5%. Goldman Sachs BDC pays out 110.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Rand Capital pays out -27.6% of its earnings in the form of a dividend.

Valuation and Earnings

This table compares Goldman Sachs BDC and Rand Capital”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Goldman Sachs BDC	$147.47 million	7.33	$62.87 million	$1.16	8.17
Rand Capital	$8.56 million	3.83	$8.83 million	($4.20)	-2.63

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

Profitability

This table compares Goldman Sachs BDC and Rand Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Goldman Sachs BDC	34.72%	12.78%	5.60%
Rand Capital	-164.74%	7.12%	6.80%

Volatility and Risk

Goldman Sachs BDC has a beta of 0.62, meaning that its share price is 38% less volatile than the S&P 500. Comparatively, Rand Capital has a beta of 0.2, meaning that its share price is 80% less volatile than the S&P 500.

Insider & Institutional Ownership

28.7% of Goldman Sachs BDC shares are owned by institutional investors. 0.1% of Goldman Sachs BDC shares are owned by company insiders. Comparatively, 68.2% of Rand Capital shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings for Goldman Sachs BDC and Rand Capital, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Goldman Sachs BDC	2	3	0	0	1.60
Rand Capital	1	0	0	0	1.00

Goldman Sachs BDC presently has a consensus target price of $9.75, suggesting a potential upside of 2.89%. Given Goldman Sachs BDC’s stronger consensus rating and higher possible upside, analysts plainly believe Goldman Sachs BDC is more favorable than Rand Capital.

Summary

Goldman Sachs BDC beats Rand Capital on 12 of the 15 factors compared between the two stocks.

About Goldman Sachs BDC

Goldman Sachs BDC, Inc. is a business development company specializing in middle market and mezzanine investment in private companies. It seeks to make capital appreciation through direct originations of secured debt, senior secured debt, junior secured debt, including first lien, first lien/last-out unitranche and second lien debt, unsecured debt, including mezzanine debt and, to a lesser extent, investments in equities. The fund primarily invests in United States. It seeks to invest between $10 million and $75 million in companies with EBITDA between $5 million and $75 million annually.

About Rand Capital

Rand Capital Corporation is a business development company specializing in subordinated debt with warrants or preferred equity and venture capital investments. Within private equity, the firm specializing in capital growth and lower middle market investments. Within venture capital, it specializing in early to late-stage private businesses. It does not prefer to invest in real estate sector. It prefers to invest in software, professional services, manufacturing, consumer, healthcare, automotive and public d stocks. It prefers to invest in East or Midwest U.S. operations sectors. It typically invests between $0.75 million and $5 million with initial target size of $1.5 million. It seeks to invest in companies having more than $2 million in revenue or having excess of $1.5 million and up to $5 million in EBITDA. It prefers to be a minority stake and seeks to take a Board seat in its portfolio companies. It typically holds its investments for a period up to five years.