Kayne Anderson BDC (NYSE:KBDC) and UBS Group (NYSE:UBS) Critical Contrast

UBS Group (NYSE:UBS) and Kayne Anderson BDC (NYSE:KBDC) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, risk, valuation, dividends and profitability.

Valuation & Earnings

This table compares UBS Group and Kayne Anderson BDC”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
UBS Group	$50.90 billion	2.93	$7.77 billion	$2.94	16.22
Kayne Anderson BDC	$84.89 million	10.16	$93.71 million	$1.09	11.99

UBS Group has higher revenue and earnings than Kayne Anderson BDC. Kayne Anderson BDC is trading at a lower price-to-earnings ratio than UBS Group, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

UBS Group has a beta of 1.19, meaning that its stock price is 19% more volatile than the S&P 500. Comparatively, Kayne Anderson BDC has a beta of 0.32, meaning that its stock price is 68% less volatile than the S&P 500.

Dividends

UBS Group pays an annual dividend of $0.35 per share and has a dividend yield of 0.7%. Kayne Anderson BDC pays an annual dividend of $1.60 per share and has a dividend yield of 12.2%. UBS Group pays out 11.9% of its earnings in the form of a dividend. Kayne Anderson BDC pays out 146.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. UBS Group has raised its dividend for 5 consecutive years.

Analyst Ratings

This is a summary of recent recommendations for UBS Group and Kayne Anderson BDC, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
UBS Group	2	5	4	0	2.18
Kayne Anderson BDC	1	2	2	0	2.20

UBS Group currently has a consensus price target of $60.30, indicating a potential upside of 26.45%. Kayne Anderson BDC has a consensus price target of $14.50, indicating a potential upside of 10.98%. Given UBS Group’s higher probable upside, equities analysts plainly believe UBS Group is more favorable than Kayne Anderson BDC.

Profitability

This table compares UBS Group and Kayne Anderson BDC’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
UBS Group	13.10%	10.50%	0.57%
Kayne Anderson BDC	31.54%	10.63%	5.06%

Summary

UBS Group beats Kayne Anderson BDC on 9 of the 15 factors compared between the two stocks.

About UBS Group

UBS Group AG provides financial advice and solutions to private, institutional, and corporate clients worldwide. It operates through five divisions: Global Wealth Management, Personal & Corporate Banking, Asset Management, Investment Bank, and Non-core and Legacy. The company offers investment advice, estate and wealth planning, investing, corporate and banking, and investment management, as well as mortgage, securities-based, and structured lending solutions. It also provides personal banking products and services, such as deposits, credit and debit cards, and online and mobile banking, as well as lending, investments, retirement, and wealth management services; and corporate and institutional solutions, including equity and debt capital markets, syndicated and structured credit, private placements, leasing, traditional financing, and transaction banking solutions for payment and cash management services, trade and export finance, and global custody solutions. In addition, the company offers equities, fixed income, hedge funds, real estate and private markets, indexed and alternative beta strategies, asset allocation and currency investment strategies, customized multi-asset solutions, advisory and fiduciary services, and multi-manager hedge fund solutions and advisory services. Further, it advises clients on strategic business opportunities and helps them raise capital to fund their activities; enables its clients to buy, sell, and finance securities on capital markets and to manage their risks and liquidity; distributes, trades in, finances, and clears cash equities and equity-linked products; structures, originates, and distributes new equity and equity-linked issues; and originates, distributes, manages risk, and provides liquidity in foreign exchange, rates, credit and precious metals. The company was formerly known as UBS AG and changed its name to UBS Group AG in December 2014. UBS Group AG was founded in 1862 and is headquartered in Zurich, Switzerland.

About Kayne Anderson BDC

Kayne Anderson BDC Inc. is a business development company which invests primarily in first lien senior secured loans, with a secondary focus on unitranche and split-lien loans to middle market companies. Kayne Anderson BDC Inc. is based in CHICAGO.