Critical Analysis: Gladstone Capital (NASDAQ:GLAD) & Baltic International USA (OTCMKTS:BISA)

Gladstone Capital (NASDAQ:GLAD) and Baltic International USA (OTCMKTS:BISA) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, profitability, valuation, risk, earnings, institutional ownership and dividends.

Volatility and Risk

Gladstone Capital has a beta of 0.92, indicating that its stock price is 8% less volatile than the S&P 500. Comparatively, Baltic International USA has a beta of -1.17, indicating that its stock price is 217% less volatile than the S&P 500.

Valuation and Earnings

This table compares Gladstone Capital and Baltic International USA”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Gladstone Capital	$89.12 million	4.81	$58.11 million	$1.83	10.36
Baltic International USA	N/A	N/A	-$30,000.00	($0.01)	N/A

Gladstone Capital has higher revenue and earnings than Baltic International USA. Baltic International USA is trading at a lower price-to-earnings ratio than Gladstone Capital, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

10.7% of Gladstone Capital shares are held by institutional investors. 3.8% of Gladstone Capital shares are held by company insiders. Comparatively, 29.4% of Baltic International USA shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Gladstone Capital and Baltic International USA, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Gladstone Capital	0	4	2	0	2.33
Baltic International USA	0	0	0	0	0.00

Gladstone Capital presently has a consensus price target of $21.67, indicating a potential upside of 14.28%. Given Gladstone Capital’s stronger consensus rating and higher probable upside, equities analysts plainly believe Gladstone Capital is more favorable than Baltic International USA.

Profitability

This table compares Gladstone Capital and Baltic International USA’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Gladstone Capital	45.15%	9.79%	5.31%
Baltic International USA	N/A	N/A	N/A

Summary

Gladstone Capital beats Baltic International USA on 11 of the 12 factors compared between the two stocks.

About Gladstone Capital

Gladstone Capital Corporation is a business development company specializing in lower middle market, growth capital, add on acquisitions, change of control, buy & build strategies, debt refinancing, debt investments in senior term loans, revolving loans, secured first and second lien term loans, senior subordinated loans, unitranche loans, junior subordinated loans, and mezzanine loans and equity investments in the form of common stock, preferred stock, limited liability company interests, or warrants. It operates as a business development company. The fund also makes private equity investments in acquisitions, buyouts and recapitalizations, and refinancing existing debts. It targets small and medium-sized companies in United States. It is industry agnostic and seeks to invest in companies engaged in the business services, light and specialty manufacturing, niche industrial products and services, specialty consumer products and services, energy services, transportation and logistics, healthcare and education services, specialty chemicals, media and communications and aerospace and defense. The fund seeks to invest between $7 million and $30 million in companies that have between $20 million and $150 million in sales and EBITDA between $3 million and $25 million. It prefers to acquire minority stakes. It seeks to exit its investments through strategic acquisitions by other industry participants or financial buyers, initial public offerings of common stock, or other capital market transactions.

About Baltic International USA

Baltic International USA, Inc. does not have significant operations. It intends to investigate and acquire a target company or business seeking to become a publicly held corporation. The company was incorporated in 1991 and is based in Houston, Texas.