Head to Head Comparison: Goldman Sachs BDC (NYSE:GSBD) & Rand Capital (NASDAQ:RAND)

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

Institutional & Insider Ownership

28.7% of Goldman Sachs BDC shares are owned by institutional investors. 0.1% of Goldman Sachs BDC shares are owned by company insiders. Comparatively, 68.2% of Rand Capital shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares Goldman Sachs BDC and Rand Capital’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%
Rand Capital	-164.74%	7.12%	6.80%

Dividends

Goldman Sachs BDC pays an annual dividend of $1.28 per share and has a dividend yield of 13.9%. Rand Capital pays an annual dividend of $1.16 per share and has a dividend yield of 10.6%. 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. Rand Capital pays out -27.6% of its earnings in the form of a dividend.

Earnings and Valuation

This table compares Goldman Sachs BDC and Rand Capital”s top-line 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	2.42	$62.87 million	$1.16	7.95
Rand Capital	$8.56 million	3.81	$8.83 million	($4.20)	-2.62

Goldman Sachs BDC has higher revenue and earnings than Rand Capital. Rand Capital 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.

Risk & Volatility

Goldman Sachs BDC has a beta of 0.62, indicating that its share price is 38% less volatile than the S&P 500. Comparatively, Rand Capital has a beta of 0.2, indicating that its share price is 80% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings for Goldman Sachs BDC and Rand Capital, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Goldman Sachs BDC	2	3	0	0	1.60
Rand Capital	1	0	0	0	1.00

Goldman Sachs BDC currently has a consensus price target of $9.75, suggesting a potential upside of 5.69%. Given Goldman Sachs BDC’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Goldman Sachs BDC is more favorable than Rand Capital.

Summary

Goldman Sachs BDC beats Rand Capital on 11 of the 15 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 Rand Capital

Rand Capital Corporation is a business development company specializing in subordinated debt with warrants or preferred equity and venture capital investments. Within private equity, the firm specializing in capital growth and lower middle market investments. Within venture capital, it specializing in early to late-stage private businesses. It does not prefer to invest in real estate sector. It prefers to invest in software, professional services, manufacturing, consumer, healthcare, automotive and public d stocks. It prefers to invest in East or Midwest U.S. operations sectors. It typically invests between $0.75 million and $5 million with initial target size of $1.5 million. It seeks to invest in companies having more than $2 million in revenue or having excess of $1.5 million and up to $5 million in EBITDA. It prefers to be a minority stake and seeks to take a Board seat in its portfolio companies. It typically holds its investments for a period up to five years.