Reviewing Runway Growth Finance (NASDAQ:RWAY) and Crescent Capital BDC (NASDAQ:CCAP)

Crescent Capital BDC (NASDAQ:CCAPGet Rating) and Runway Growth Finance (NASDAQ:RWAYGet Rating) are both small-cap finance companies, but which is the better stock? We will compare the two companies based on the strength of their risk, analyst recommendations, institutional ownership, valuation, dividends, earnings and profitability.

Insider and Institutional Ownership

35.2% of Crescent Capital BDC shares are owned by institutional investors. Comparatively, 63.2% of Runway Growth Finance shares are owned by institutional investors. 1.1% of Crescent Capital BDC shares are owned by company insiders. Comparatively, 0.6% of Runway Growth Finance shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Crescent Capital BDC and Runway Growth Finance’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Crescent Capital BDC 43.62% 8.00% 3.96%
Runway Growth Finance 39.17% 8.50% 6.55%

Valuation and Earnings

This table compares Crescent Capital BDC and Runway Growth Finance’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Crescent Capital BDC $93.99 million 5.84 $83.63 million $1.51 11.77
Runway Growth Finance $71.36 million 6.85 $45.62 million $0.85 14.12

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

Dividends

Crescent Capital BDC pays an annual dividend of $1.64 per share and has a dividend yield of 9.2%. Runway Growth Finance pays an annual dividend of $1.32 per share and has a dividend yield of 11.0%. Crescent Capital BDC pays out 108.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Runway Growth Finance pays out 155.3% 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 breakdown of recent ratings for Crescent Capital BDC and Runway Growth Finance, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Crescent Capital BDC 0 0 4 0 3.00
Runway Growth Finance 0 0 8 0 3.00

Crescent Capital BDC presently has a consensus target price of $19.38, indicating a potential upside of 8.97%. Runway Growth Finance has a consensus target price of $15.25, indicating a potential upside of 27.08%. Given Runway Growth Finance’s higher probable upside, analysts clearly believe Runway Growth Finance is more favorable than Crescent Capital BDC.

Summary

Runway Growth Finance beats Crescent Capital BDC on 8 of the 14 factors compared between the two stocks.

About Crescent Capital BDC

(Get Rating)

Crescent Capital BDC, Inc. is as a business development company private equity / buyouts and loan fund. It specializes in directly investing. It specializes in middle market. The fund seeks to invest in United States.

About Runway Growth Finance

(Get Rating)

Runway Growth Finance Corp. is a business development company specializing investments in senior-secured loans to late stage and growth companies. It prefers to make investments in companies engaged in the technology, life sciences, healthcare and information services, business services and select consumer services and products sectors. It prefers to investments in companies engaged in electronic equipment and instruments, systems software, hardware, storage and peripherals and specialized consumer services, application software, healthcare technology, internet software and services, data processing and outsourced services, internet retail, human resources and employment services, biotechnology, healthcare equipment and education services. It invests in senior secured loans between $10 million and $75 million.

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