Financial Survey: Palmer Square Capital BDC (NYSE:PSBD) versus Blackstone Secured Lending Fund (NYSE:BXSL)

Palmer Square Capital BDC (NYSE:PSBD) and Blackstone Secured Lending Fund (NYSE:BXSL) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their earnings, risk, valuation, profitability, analyst recommendations, institutional ownership and dividends.

Profitability

This table compares Palmer Square Capital BDC and Blackstone Secured Lending Fund’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Palmer Square Capital BDC	-2.55%	10.82%	4.13%
Blackstone Secured Lending Fund	39.69%	11.82%	5.23%

Analyst Recommendations

This is a breakdown of current ratings and target prices for Palmer Square Capital BDC and Blackstone Secured Lending Fund, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Palmer Square Capital BDC	0	4	0	0	2.00
Blackstone Secured Lending Fund	1	2	6	0	2.56

Palmer Square Capital BDC presently has a consensus target price of $11.88, suggesting a potential upside of 17.01%. Blackstone Secured Lending Fund has a consensus target price of $27.09, suggesting a potential upside of 14.30%. Given Palmer Square Capital BDC’s higher possible upside, research analysts plainly believe Palmer Square Capital BDC is more favorable than Blackstone Secured Lending Fund.

Valuation and Earnings

This table compares Palmer Square Capital BDC and Blackstone Secured Lending Fund”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Palmer Square Capital BDC	$124.39 million	2.55	-$3.17 million	($0.11)	-92.26
Blackstone Secured Lending Fund	$1.42 billion	3.88	$563.46 million	$2.46	9.64

Blackstone Secured Lending Fund has higher revenue and earnings than Palmer Square Capital BDC. Palmer Square Capital BDC is trading at a lower price-to-earnings ratio than Blackstone Secured Lending Fund, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

6.5% of Palmer Square Capital BDC shares are held by institutional investors. Comparatively, 36.5% of Blackstone Secured Lending Fund shares are held by institutional investors. 1.1% of Palmer Square Capital BDC shares are held by company insiders. Comparatively, 0.1% of Blackstone Secured Lending Fund shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Risk and Volatility

Palmer Square Capital BDC has a beta of 0.7, suggesting that its stock price is 30% less volatile than the S&P 500. Comparatively, Blackstone Secured Lending Fund has a beta of 0.4, suggesting that its stock price is 60% less volatile than the S&P 500.

Dividends

Palmer Square Capital BDC pays an annual dividend of $1.44 per share and has a dividend yield of 14.2%. Blackstone Secured Lending Fund pays an annual dividend of $3.08 per share and has a dividend yield of 13.0%. Palmer Square Capital BDC pays out -1,309.1% of its earnings in the form of a dividend. Blackstone Secured Lending Fund pays out 125.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Palmer Square Capital BDC is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Blackstone Secured Lending Fund beats Palmer Square Capital BDC on 11 of the 16 factors compared between the two stocks.

About Palmer Square Capital BDC

Palmer Square Capital BDC Inc. is an externally managed, non-diversified closed-end management investment company which primarily lends to and invests in corporate debt securities, including small to large private U.S. companies and has elected to be regulated as a business development company. Palmer Square Capital BDC Inc. is based in MISSION WOODS, Kan.

About Blackstone Secured Lending Fund

Blackstone Secured Lending Fund is business development company and a Delaware statutory trust formed on March 26, 2018, and structured as an externally managed, non-diversified closed-end investment Fund. On October 26, 2018, the fund elected to be regulated as a business development company (BDC) under the Investment Company Act of 1940, as amended (the 1940 Act). In addition, the Fund elected to be treated for U.S. federal income tax purposes, as a regulated investment company (RIC), as defined under Subchapter M of the Internal Revenue Code of 1986, as amended (the Code). The fund also intends to continue to comply with the requirements prescribed by the Code in order to maintain tax treatment as a RIC. The fund's investment objectives are to generate current income and, to a lesser extent, long-term capital appreciation. The Fund seeks to achieve its investment objective primarily through originated loans, equity and other securities, including syndicated loans, of private U.S. companies, specifically small and middle market companies, typically in the form of first lien senior secured and unitranche loans (including first out/last out loans), and to a lesser extent, second lien, third lien, unsecured and subordinated loans and other debt and equity securities.