Barings Bdc (NYSE:BBDC – Get Free Report) and Rand Capital (NASDAQ:RAND – Get Free Report) are both small-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their earnings, dividends, institutional ownership, risk, profitability, analyst recommendations and valuation.
Volatility & Risk
Barings Bdc has a beta of 0.6, suggesting that its share price is 40% less volatile than the S&P 500. Comparatively, Rand Capital has a beta of 0.2, suggesting that its share price is 80% less volatile than the S&P 500.
Analyst Recommendations
This is a summary of current recommendations and price targets for Barings Bdc and Rand Capital, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Barings Bdc | 0 | 1 | 3 | 0 | 2.75 |
| Rand Capital | 1 | 0 | 0 | 0 | 1.00 |
Earnings and Valuation
This table compares Barings Bdc and Rand Capital”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Barings Bdc | $279.21 million | 3.35 | $101.92 million | $0.97 | 9.21 |
| Rand Capital | $8.56 million | 3.89 | $8.83 million | ($4.20) | -2.67 |
Barings Bdc has higher revenue and earnings than Rand Capital. Rand Capital is trading at a lower price-to-earnings ratio than Barings Bdc, indicating that it is currently the more affordable of the two stocks.
Dividends
Barings Bdc pays an annual dividend of $1.04 per share and has a dividend yield of 11.6%. Rand Capital pays an annual dividend of $1.16 per share and has a dividend yield of 10.4%. Barings Bdc pays out 107.2% 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. Barings Bdc has raised its dividend for 3 consecutive years. Barings Bdc is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Institutional & Insider Ownership
44.1% of Barings Bdc shares are held by institutional investors. 0.5% of Barings Bdc shares are held by insiders. Comparatively, 68.2% of Rand Capital shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Profitability
This table compares Barings Bdc and Rand Capital’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Barings Bdc | 36.50% | 10.05% | 4.27% |
| Rand Capital | -164.74% | 7.12% | 6.80% |
Summary
Barings Bdc beats Rand Capital on 13 of the 17 factors compared between the two stocks.
About Barings Bdc
Barings BDC, Inc. is a publicly traded, externally managed investment company that has elected to be treated as a business development company under the Investment Company Act of 1940. It seeks to invest primarily in senior secured loans, first lien debt, unitranche, second lien debt, subordinated debt, equity co-investments and senior secured private debt investments in private middle-market companies that operate across a wide range of industries. It specializes in mezzanine, leveraged buyouts, management buyouts, ESOPs, change of control transactions, acquisition financings, growth financing, and recapitalizations in lower middle market, mature, and later stage companies. It invests in manufacturing and distribution; business services and technology; transportation and logistics; consumer product and services. It invests in United States. It invests in companies with EBITDA of $10 million to $75 million, typically in private equity sponsor backed.
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.
Receive News & Ratings for Barings Bdc Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Barings Bdc and related companies with MarketBeat.com's FREE daily email newsletter.
