Comparing Chicago Atlantic BDC (NASDAQ:LIEN) & Rand Capital (NASDAQ:RAND)

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

Institutional and Insider Ownership

4.4% of Chicago Atlantic BDC shares are held by institutional investors. 68.2% of Rand Capital shares are held by company insiders. Comparatively, 12.9% of Chicago Atlantic BDC shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Rand Capital	-2.67%	5.47%	5.23%
Chicago Atlantic BDC	52.82%	11.66%	10.21%

Dividends

Rand Capital pays an annual dividend of $1.16 per share and has a dividend yield of 10.7%. Chicago Atlantic BDC pays an annual dividend of $1.36 per share and has a dividend yield of 13.2%. Rand Capital pays out -2,900.0% of its earnings in the form of a dividend. Chicago Atlantic BDC pays out 97.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Ratings

This is a summary of current ratings and price targets for Rand Capital and Chicago Atlantic BDC, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rand Capital	1	0	0	0	1.00
Chicago Atlantic BDC	0	1	0	0	2.00

Volatility and Risk

Rand Capital has a beta of 0.11, meaning that its share price is 89% less volatile than the S&P 500. Comparatively, Chicago Atlantic BDC has a beta of 0.3, meaning that its share price is 70% less volatile than the S&P 500.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rand Capital	$1.58 million	20.38	-$8.04 million	($0.04)	-270.73
Chicago Atlantic BDC	$54.30 million	4.33	$33.28 million	$1.39	7.42

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

Summary

Chicago Atlantic BDC beats Rand Capital on 11 of the 14 factors compared between the two stocks.

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.

About Chicago Atlantic BDC

Chicago Atlantic BDC Inc. is a specialty finance company which has elected to be regulated as a business development company. Its investment objective is to maximize risk-adjusted returns on equity for its stockholders by investing primarily in direct loans to privately held middle-market companies, with a primary focus on cannabis companies. Chicago Atlantic BDC Inc., formerly known as CHICAGO ATLNTIC, is based in NEW YORK.