Analyzing Nuveen Churchill Direct Lending (NYSE:NCDL) and Chicago Atlantic BDC (NASDAQ:LIEN)

Chicago Atlantic BDC (NASDAQ:LIEN) and Nuveen Churchill Direct Lending (NYSE:NCDL) are both small-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, dividends, profitability, analyst recommendations, valuation, earnings and risk.

Earnings and Valuation

This table compares Chicago Atlantic 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
Chicago Atlantic BDC	$54.30 million	4.02	$33.28 million	$0.80	11.95
Nuveen Churchill Direct Lending	$207.86 million	3.11	$65.61 million	$1.31	9.99

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Chicago Atlantic BDC	33.24%	5.88%	5.41%
Nuveen Churchill Direct Lending	31.57%	10.48%	4.47%

Analyst Recommendations

This is a breakdown of current recommendations for Chicago Atlantic BDC and Nuveen Churchill Direct Lending, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Chicago Atlantic BDC	0	3	0	0	2.00
Nuveen Churchill Direct Lending	0	4	2	0	2.33

Nuveen Churchill Direct Lending has a consensus target price of $15.40, indicating a potential upside of 17.72%. Given Nuveen Churchill Direct Lending’s stronger consensus rating and higher probable upside, analysts plainly believe Nuveen Churchill Direct Lending is more favorable than Chicago Atlantic BDC.

Institutional and Insider Ownership

4.4% of Chicago Atlantic BDC shares are held by institutional investors. 16.9% of Chicago Atlantic BDC shares are held by company insiders. Comparatively, 0.6% of Nuveen Churchill Direct Lending shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Risk & Volatility

Chicago Atlantic BDC has a beta of 0.28, meaning that its share price is 72% less volatile than the S&P 500. Comparatively, Nuveen Churchill Direct Lending has a beta of 0.32, meaning that its share price is 68% less volatile than the S&P 500.

Dividends

Chicago Atlantic BDC pays an annual dividend of $1.36 per share and has a dividend yield of 14.2%. Nuveen Churchill Direct Lending pays an annual dividend of $1.44 per share and has a dividend yield of 11.0%. Chicago Atlantic BDC pays out 170.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Nuveen Churchill Direct Lending pays out 109.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

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

About Chicago Atlantic BDC

Chicago Atlantic BDC Inc. is a specialty finance company which has elected to be regulated as a business development company. Its investment objective is to maximize risk-adjusted returns on equity for its stockholders by investing primarily in direct loans to privately held middle-market companies, with a primary focus on cannabis companies. Chicago Atlantic BDC Inc., formerly known as CHICAGO ATLNTIC, is based in NEW YORK.

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.