Head-To-Head Contrast: Kayne Anderson BDC (NYSE:KBDC) and Goldman Sachs BDC (NYSE:GSBD)

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

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Kayne Anderson BDC and Goldman Sachs BDC, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kayne Anderson BDC	0	2	2	0	2.50
Goldman Sachs BDC	2	0	0	0	1.00

Kayne Anderson BDC presently has a consensus target price of $16.50, suggesting a potential upside of 15.87%. Goldman Sachs BDC has a consensus target price of $10.00, suggesting a potential downside of 11.03%. Given Kayne Anderson BDC’s stronger consensus rating and higher possible upside, research analysts clearly believe Kayne Anderson BDC is more favorable than Goldman Sachs BDC.

Dividends

Kayne Anderson BDC pays an annual dividend of $1.60 per share and has a dividend yield of 11.2%. Goldman Sachs BDC pays an annual dividend of $1.28 per share and has a dividend yield of 11.4%. Kayne Anderson BDC pays out 94.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Goldman Sachs BDC pays out 101.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Risk and Volatility

Kayne Anderson BDC has a beta of 0.28, meaning that its stock price is 72% less volatile than the S&P 500. Comparatively, Goldman Sachs BDC has a beta of 0.75, meaning that its stock price is 25% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Kayne Anderson BDC	52.99%	10.90%	5.97%
Goldman Sachs BDC	36.17%	13.95%	6.17%

Institutional and Insider Ownership

28.7% of Goldman Sachs BDC shares are owned by institutional investors. 3.1% of Kayne Anderson BDC shares are owned by insiders. Comparatively, 0.1% of Goldman Sachs BDC shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Kayne Anderson BDC and Goldman Sachs BDC”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kayne Anderson BDC	$213.11 million	4.72	$131.94 million	$1.69	8.43
Goldman Sachs BDC	$434.37 million	2.95	$62.87 million	$1.26	8.92

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

Summary

Kayne Anderson BDC beats Goldman Sachs BDC on 9 of the 16 factors compared between the two stocks.

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.

About Goldman Sachs BDC

Goldman Sachs BDC, Inc. is a business development company specializing in middle market and mezzanine investment in private companies. It seeks to make capital appreciation through direct originations of secured debt, senior secured debt, junior secured debt, including first lien, first lien/last-out unitranche and second lien debt, unsecured debt, including mezzanine debt and, to a lesser extent, investments in equities. The fund primarily invests in United States. It seeks to invest between $10 million and $75 million in companies with EBITDA between $5 million and $75 million annually.