Critical Analysis: Golub Capital BDC (GBDC) and MCG Capital (MCGC)
Golub Capital BDC (NASDAQ: GBDC) and MCG Capital (NASDAQ:MCGC) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, earnings, valuation, risk, dividends, analyst recommendations and institutional ownership.
This is a summary of recent recommendations for Golub Capital BDC and MCG Capital, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Golub Capital BDC||0||3||0||0||2.00|
Golub Capital BDC presently has a consensus target price of $19.50, suggesting a potential upside of 5.63%.
This table compares Golub Capital BDC and MCG Capital’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Golub Capital BDC||58.06%||7.90%||4.06%|
Golub Capital BDC pays an annual dividend of $1.28 per share and has a dividend yield of 6.9%. MCG Capital does not pay a dividend. Golub Capital BDC pays out 90.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Valuation & Earnings
This table compares Golub Capital BDC and MCG Capital’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Golub Capital BDC||$137.76 million||7.98||$82.28 million||$1.41||13.09|
Golub Capital BDC has higher revenue and earnings than MCG Capital. MCG Capital is trading at a lower price-to-earnings ratio than Golub Capital BDC, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
40.6% of Golub Capital BDC shares are held by institutional investors. 10.7% of Golub Capital BDC shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Golub Capital BDC beats MCG Capital on 8 of the 9 factors compared between the two stocks.
Golub Capital BDC Company Profile
Golub Capital BDC, Inc. is an externally managed, non-diversified, closed-end, management investment company. The Company’s investment objective is to generate current income and capital appreciation by investing primarily in senior secured and one stop loans of the United States middle-market companies. It may also selectively invest in second lien and subordinated loans of, and warrants and minority equity securities in the United States middle-market companies. The Company seeks to create a portfolio that includes primarily senior secured and one stop loans by primarily investing in the securities of the United States middle-market companies. It generally invests in securities that have been rated below investment grade by independent rating agencies or that would be rated below investment grade if they were rated. The Company’s investment activities are managed by its investment advisor, GC Advisors LLC (GC Advisors).
MCG Capital Company Profile
PFLT Funding II, LLC, formerly MCG Capital Corporation, is a United States-based company. The Company provides products and services.
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