Blackstone Secured Lending Fund (NYSE:BXSL) vs. Golub Capital BDC (NASDAQ:GBDC) Critical Analysis

Blackstone Secured Lending Fund (NYSE:BXSL) and Golub Capital BDC (NASDAQ:GBDC) are both mid-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, risk, valuation, profitability, dividends and earnings.

Risk and Volatility

Blackstone Secured Lending Fund has a beta of 0.46, meaning that its share price is 54% less volatile than the S&P 500. Comparatively, Golub Capital BDC has a beta of 0.51, meaning that its share price is 49% less volatile than the S&P 500.

Institutional & Insider Ownership

36.5% of Blackstone Secured Lending Fund shares are held by institutional investors. Comparatively, 42.4% of Golub Capital BDC shares are held by institutional investors. 0.1% of Blackstone Secured Lending Fund shares are held by insiders. Comparatively, 3.6% of Golub Capital BDC shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Dividends

Blackstone Secured Lending Fund pays an annual dividend of $3.08 per share and has a dividend yield of 10.3%. Golub Capital BDC pays an annual dividend of $1.56 per share and has a dividend yield of 10.6%. Blackstone Secured Lending Fund pays out 108.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Golub Capital BDC pays out 109.9% 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 Recommendations

This is a summary of recent recommendations and price targets for Blackstone Secured Lending Fund and Golub Capital BDC, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Blackstone Secured Lending Fund	0	2	3	0	2.60
Golub Capital BDC	0	1	2	0	2.67

Blackstone Secured Lending Fund presently has a consensus price target of $31.25, indicating a potential upside of 4.36%. Golub Capital BDC has a consensus price target of $15.00, indicating a potential upside of 1.49%. Given Blackstone Secured Lending Fund’s higher possible upside, research analysts clearly believe Blackstone Secured Lending Fund is more favorable than Golub Capital BDC.

Profitability

This table compares Blackstone Secured Lending Fund and Golub Capital BDC’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Blackstone Secured Lending Fund	44.25%	12.07%	5.48%
Golub Capital BDC	42.81%	10.87%	4.87%

Valuation & Earnings

This table compares Blackstone Secured Lending Fund and Golub Capital BDC”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Blackstone Secured Lending Fund	$1.33 billion	5.20	$694.10 million	$2.84	10.54
Golub Capital BDC	$397.72 million	9.90	$273.79 million	$1.42	10.41

Blackstone Secured Lending Fund has higher revenue and earnings than Golub Capital BDC. Golub Capital BDC is trading at a lower price-to-earnings ratio than Blackstone Secured Lending Fund, indicating that it is currently the more affordable of the two stocks.

Summary

Blackstone Secured Lending Fund beats Golub Capital BDC on 10 of the 16 factors compared between the two stocks.

About Blackstone Secured Lending Fund

Blackstone Secured Lending Fund is business development company and a Delaware statutory trust formed on March 26, 2018, and structured as an externally managed, non-diversified closed-end investment Fund. On October 26, 2018, the fund elected to be regulated as a business development company (BDC) under the Investment Company Act of 1940, as amended (the 1940 Act). In addition, the Fund elected to be treated for U.S. federal income tax purposes, as a regulated investment company (RIC), as defined under Subchapter M of the Internal Revenue Code of 1986, as amended (the Code). The fund also intends to continue to comply with the requirements prescribed by the Code in order to maintain tax treatment as a RIC. The fund's investment objectives are to generate current income and, to a lesser extent, long-term capital appreciation. The Fund seeks to achieve its investment objective primarily through originated loans, equity and other securities, including syndicated loans, of private U.S. companies, specifically small and middle market companies, typically in the form of first lien senior secured and unitranche loans (including first out/last out loans), and to a lesser extent, second lien, third lien, unsecured and subordinated loans and other debt and equity securities.

About Golub Capital BDC

Golub Capital BDC, Inc. (GBDC) is a business development company and operates as an externally managed closed-end non-diversified management investment company. It invests in debt and minority equity investments in middle-market companies that are, in most cases, sponsored by private equity investors. It typically invests in diversified consumer services, automobiles, healthcare technology, insurance, health care equipment and supplies, hotels, restaurants and leisure, healthcare providers and services, IT services and specialty retails. It seeks to invest in the United States. It primarily invests in first lien traditional senior debt, first lien one stop, junior debt and equity, senior secured, one stop, unitranche, second lien, subordinated and mezzanine loans of middle-market companies, and warrants.