Comparing Kayne Anderson BDC (NYSE:KBDC) and Bain Capital Specialty Finance (NYSE:BCSF)

Bain Capital Specialty Finance (NYSE:BCSF) and Kayne Anderson BDC (NYSE:KBDC) are both small-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, valuation, risk, earnings and profitability.

Dividends

Bain Capital Specialty Finance pays an annual dividend of $1.68 per share and has a dividend yield of 12.0%. Kayne Anderson BDC pays an annual dividend of $1.60 per share and has a dividend yield of 11.2%. Bain Capital Specialty Finance pays out 116.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Kayne Anderson BDC pays out 106.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Bain Capital Specialty Finance has increased its dividend for 4 consecutive years. Bain Capital Specialty Finance is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Bain Capital Specialty Finance and Kayne Anderson BDC’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bain Capital Specialty Finance	33.45%	11.03%	4.66%
Kayne Anderson BDC	46.55%	10.40%	5.44%

Earnings & Valuation

This table compares Bain Capital Specialty Finance and Kayne Anderson BDC”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bain Capital Specialty Finance	$292.65 million	3.10	$119.42 million	$1.44	9.70
Kayne Anderson BDC	$213.11 million	4.59	$131.94 million	$1.51	9.47

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

Analyst Ratings

This is a summary of current ratings and recommmendations for Bain Capital Specialty Finance and Kayne Anderson BDC, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bain Capital Specialty Finance	0	1	2	0	2.67
Kayne Anderson BDC	0	1	3	0	2.75

Bain Capital Specialty Finance presently has a consensus target price of $15.50, indicating a potential upside of 10.99%. Kayne Anderson BDC has a consensus target price of $15.50, indicating a potential upside of 8.34%. Given Bain Capital Specialty Finance’s higher possible upside, equities research analysts clearly believe Bain Capital Specialty Finance is more favorable than Kayne Anderson BDC.

Volatility and Risk

Bain Capital Specialty Finance has a beta of 0.6, suggesting that its share price is 40% less volatile than the S&P 500. Comparatively, Kayne Anderson BDC has a beta of 0.16, suggesting that its share price is 84% less volatile than the S&P 500.

Summary

Kayne Anderson BDC beats Bain Capital Specialty Finance on 8 of the 15 factors compared between the two stocks.

About Bain Capital Specialty Finance

Bain Capital Specialty Finance, Inc. is business development company specializing in direct loans to middle-market companies. The fund seeks to invest in senior investments with a first or second lien on collateral, senior first lien, stretch senior, senior second lien, unitranche, mezzanine debt, junior securities, other junior investments, and secondary purchases of assets or portfolios that primarily consist of middle-market corporate debt. It typically invests in companies with EBITDA between $10 million and $150 million.

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.