Blackrock Tcp Capital (NASDAQ:TCPC) and Palmer Square Capital BDC (NYSE:PSBD) Head-To-Head Contrast

Blackrock Tcp Capital (NASDAQ:TCPC) and Palmer Square Capital BDC (NYSE:PSBD) are both small-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, institutional ownership, analyst recommendations, dividends, valuation, earnings and profitability.

Insider and Institutional Ownership

6.5% of Palmer Square Capital BDC shares are owned by institutional investors. 0.2% of Blackrock Tcp Capital shares are owned by company insiders. Comparatively, 1.0% of Palmer Square Capital BDC shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Blackrock Tcp Capital and Palmer Square Capital BDC”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Blackrock Tcp Capital	$259.44 million	1.90	-$63.14 million	($0.17)	-34.06
Palmer Square Capital BDC	$143.51 million	2.78	$47.67 million	$0.56	22.21

Palmer Square Capital BDC has lower revenue, but higher earnings than Blackrock Tcp Capital. Blackrock Tcp Capital is trading at a lower price-to-earnings ratio than Palmer Square Capital BDC, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Blackrock Tcp Capital has a beta of 1.04, meaning that its share price is 4% more volatile than the S&P 500. Comparatively, Palmer Square Capital BDC has a beta of 0.71, meaning that its share price is 29% less volatile than the S&P 500.

Profitability

This table compares Blackrock Tcp Capital and Palmer Square Capital BDC’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Blackrock Tcp Capital	-4.98%	15.12%	6.14%
Palmer Square Capital BDC	13.51%	10.91%	4.15%

Analyst Ratings

This is a summary of recent ratings and recommmendations for Blackrock Tcp Capital and Palmer Square Capital BDC, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Blackrock Tcp Capital	2	1	0	0	1.33
Palmer Square Capital BDC	0	3	1	0	2.25

Blackrock Tcp Capital currently has a consensus price target of $6.75, indicating a potential upside of 16.58%. Palmer Square Capital BDC has a consensus price target of $13.63, indicating a potential upside of 9.57%. Given Blackrock Tcp Capital’s higher probable upside, analysts clearly believe Blackrock Tcp Capital is more favorable than Palmer Square Capital BDC.

Dividends

Blackrock Tcp Capital pays an annual dividend of $1.00 per share and has a dividend yield of 17.3%. Palmer Square Capital BDC pays an annual dividend of $1.44 per share and has a dividend yield of 11.6%. Blackrock Tcp Capital pays out -588.2% of its earnings in the form of a dividend. Palmer Square Capital BDC pays out 257.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Blackrock Tcp Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Palmer Square Capital BDC beats Blackrock Tcp Capital on 9 of the 16 factors compared between the two stocks.

About Blackrock Tcp Capital

BlackRock TCP Capital Corp. is a business development company specializing in direct equity and debt investments in middle-market, small businesses, debt securities, senior secured loans, junior loans, originated loans, mezzanine, senior debt instruments, bonds, and secondary-market investments. It typically invests in communication services, public relations services, television, wireless telecommunication services, apparel, textile mills, restaurants, retailing, energy, oil and gas extraction, Patent owners and Lessors, Federal and Federally- Sponsored Credit agencies, insurance, hospital and healthcare centers, Biotechnology, engineering services, heavy electrical equipment, tax accounting, scientific and related consulting services, charter freight air transportation, Information technology consulting, application hosting services, software diagram and design, computer aided design, communication equipment, electronics manufacturing equipment, computer components, chemicals. It seeks to invest in the United States. The fund typically invests between $10 million and $35 million in companies with enterprise values between $100 million and $1500 million including complex situations. It prefers to make equity investments in companies for an ownership stake.

About Palmer Square Capital BDC

Palmer Square Capital BDC Inc. is an externally managed, non-diversified closed-end management investment company which primarily lends to and invests in corporate debt securities, including small to large private U.S. companies and has elected to be regulated as a business development company. Palmer Square Capital BDC Inc. is based in MISSION WOODS, Kan.