Nuveen Churchill Direct Lending (NYSE:NCDL) vs. Goldman Sachs BDC (NYSE:GSBD) Critical Contrast

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

Earnings & Valuation

This table compares Goldman Sachs BDC and Nuveen Churchill Direct Lending”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Goldman Sachs BDC	$434.37 million	2.44	$62.87 million	$1.16	8.00
Nuveen Churchill Direct Lending	$224.04 million	2.97	$116.32 million	$1.53	8.80

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

Risk & Volatility

Goldman Sachs BDC has a beta of 0.63, indicating that its share price is 37% less volatile than the S&P 500. Comparatively, Nuveen Churchill Direct Lending has a beta of 0.4, indicating that its share price is 60% less volatile than the S&P 500.

Profitability

This table compares Goldman Sachs BDC and Nuveen Churchill Direct Lending’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Goldman Sachs BDC	34.72%	12.78%	5.60%
Nuveen Churchill Direct Lending	36.83%	11.13%	4.83%

Dividends

Goldman Sachs BDC pays an annual dividend of $1.28 per share and has a dividend yield of 13.8%. Nuveen Churchill Direct Lending pays an annual dividend of $1.80 per share and has a dividend yield of 13.4%. Goldman Sachs BDC pays out 110.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Nuveen Churchill Direct Lending pays out 117.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Goldman Sachs BDC is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional and Insider Ownership

28.7% of Goldman Sachs BDC shares are held by institutional investors. 0.1% of Goldman Sachs BDC shares are held by insiders. Comparatively, 0.6% of Nuveen Churchill Direct Lending shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and target prices for Goldman Sachs BDC and Nuveen Churchill Direct Lending, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Goldman Sachs BDC	2	3	0	0	1.60
Nuveen Churchill Direct Lending	1	3	1	0	2.00

Goldman Sachs BDC currently has a consensus target price of $9.75, indicating a potential upside of 5.06%. Nuveen Churchill Direct Lending has a consensus target price of $15.75, indicating a potential upside of 16.93%. Given Nuveen Churchill Direct Lending’s stronger consensus rating and higher probable upside, analysts clearly believe Nuveen Churchill Direct Lending is more favorable than Goldman Sachs BDC.

Summary

Nuveen Churchill Direct Lending beats Goldman Sachs BDC on 9 of the 16 factors compared between the two stocks.

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.

About Nuveen Churchill Direct Lending

Nuveen Churchill Direct Lending Corp. is a specialty finance company focused primarily on investing in senior secured loans to private equity-owned U.S. middle market companies. It has elected to be regulated as a business development company. Nuveen Churchill Direct Lending Corp. is based in NEW YORK.