Comparing Horizon Technology Finance (NASDAQ:HRZN) and Crescent Capital BDC (NASDAQ:CCAP)

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

Volatility and Risk

Crescent Capital BDC has a beta of 0.55, indicating that its stock price is 45% less volatile than the S&P 500. Comparatively, Horizon Technology Finance has a beta of 1.1, indicating that its stock price is 10% more volatile than the S&P 500.

Dividends

Crescent Capital BDC pays an annual dividend of $1.68 per share and has a dividend yield of 13.6%. Horizon Technology Finance pays an annual dividend of $0.72 per share and has a dividend yield of 16.8%. Crescent Capital BDC pays out 178.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Horizon Technology Finance pays out -450.0% of its earnings in the form of a dividend. Crescent Capital BDC has raised its dividend for 1 consecutive years. Horizon Technology Finance is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a breakdown of current ratings for Crescent Capital BDC and Horizon Technology Finance, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Crescent Capital BDC	0	3	3	1	2.71
Horizon Technology Finance	3	4	1	0	1.75

Crescent Capital BDC presently has a consensus price target of $15.60, indicating a potential upside of 26.11%. Horizon Technology Finance has a consensus price target of $6.17, indicating a potential upside of 44.08%. Given Horizon Technology Finance’s higher possible upside, analysts clearly believe Horizon Technology Finance is more favorable than Crescent Capital BDC.

Valuation and Earnings

This table compares Crescent Capital BDC and Horizon Technology Finance”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Crescent Capital BDC	$167.29 million	2.73	$34.51 million	$0.94	13.16
Horizon Technology Finance	$96.02 million	2.13	-$2.66 million	($0.16)	-26.75

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Crescent Capital BDC	20.64%	9.32%	4.07%
Horizon Technology Finance	-2.77%	14.52%	5.76%

Insider & Institutional Ownership

49.5% of Crescent Capital BDC shares are owned by institutional investors. Comparatively, 4.9% of Horizon Technology Finance shares are owned by institutional investors. 1.1% of Crescent Capital BDC shares are owned by insiders. Comparatively, 1.3% of Horizon Technology Finance shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Summary

Crescent Capital BDC beats Horizon Technology Finance on 11 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 Horizon Technology Finance

Horizon Technology Finance Corporation is a business development company specializing in lending and and investing in development-stage investments. It focuses on making secured debt and venture lending investments to venture capital backed companies in the technology, life science, healthcare information and services, cleantech and sustainability industries. It seeks to invest in companies in the United States.