WhiteHorse Finance (NASDAQ:WHF) versus Crescent Capital BDC (NASDAQ:CCAP) Critical Comparison

Crescent Capital BDC (NASDAQ:CCAP) and WhiteHorse Finance (NASDAQ:WHF) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, dividends, risk, institutional ownership, valuation, analyst recommendations and earnings.

Valuation and Earnings

This table compares Crescent Capital BDC and WhiteHorse 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	$197.36 million	2.56	$73.65 million	$0.98	13.94
WhiteHorse Finance	$15.86 million	10.32	$10.85 million	$0.43	16.37

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

Dividends

Crescent Capital BDC pays an annual dividend of $1.68 per share and has a dividend yield of 12.3%. WhiteHorse Finance pays an annual dividend of $1.00 per share and has a dividend yield of 14.2%. Crescent Capital BDC pays out 171.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. WhiteHorse Finance pays out 232.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Crescent Capital BDC has raised its dividend for 1 consecutive years and WhiteHorse Finance has raised its dividend for 3 consecutive years. WhiteHorse Finance is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Crescent Capital BDC and WhiteHorse Finance, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Crescent Capital BDC	1	1	3	1	2.67
WhiteHorse Finance	3	2	0	0	1.40

Crescent Capital BDC presently has a consensus target price of $16.38, indicating a potential upside of 19.88%. WhiteHorse Finance has a consensus target price of $7.75, indicating a potential upside of 10.09%. Given Crescent Capital BDC’s stronger consensus rating and higher probable upside, research analysts clearly believe Crescent Capital BDC is more favorable than WhiteHorse Finance.

Volatility and Risk

Crescent Capital BDC has a beta of 0.57, suggesting that its stock price is 43% less volatile than the S&P 500. Comparatively, WhiteHorse Finance has a beta of 0.79, suggesting that its stock price is 21% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Crescent Capital BDC	20.84%	9.76%	4.30%
WhiteHorse Finance	4.36%	10.72%	4.51%

Institutional & Insider Ownership

49.5% of Crescent Capital BDC shares are owned by institutional investors. Comparatively, 13.2% of WhiteHorse Finance shares are owned by institutional investors. 1.1% of Crescent Capital BDC shares are owned by insiders. Comparatively, 2.5% of WhiteHorse Finance shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

Crescent Capital BDC beats WhiteHorse Finance on 10 of the 18 factors compared between the two stocks.

About Crescent Capital BDC

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 WhiteHorse Finance

WhiteHorse Finance, Inc. is business development company, non-diversified, closed end management company specializing in originating senior secured loans, lower middle market, growth capital industries. It invests in broadline retail, office services and supplies, building products, health care services, health care supplies, research and consulting services, application software, home furnishings, specialized consumer services, data processing and outsourced services, leisure facilities, cable, and satellite. It prefers to invest in United States. It typically invests between $5 million to $25 million in companies having enterprise value of between $50 million and $350 million.