Head to Head Review: Palmer Square Capital BDC (NYSE:PSBD) & TriplePoint Venture Growth BDC (NYSE:TPVG)

Palmer Square Capital BDC (NYSE:PSBD) and TriplePoint Venture Growth BDC (NYSE:TPVG) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, institutional ownership, risk, dividends, analyst recommendations, earnings and valuation.

Dividends

Palmer Square Capital BDC pays an annual dividend of $1.44 per share and has a dividend yield of 13.6%. TriplePoint Venture Growth BDC pays an annual dividend of $0.92 per share and has a dividend yield of 17.6%. Palmer Square Capital BDC pays out -1,309.1% of its earnings in the form of a dividend. TriplePoint Venture Growth BDC pays out 74.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Insider & Institutional Ownership

6.5% of Palmer Square Capital BDC shares are owned by institutional investors. Comparatively, 12.8% of TriplePoint Venture Growth BDC shares are owned by institutional investors. 1.1% of Palmer Square Capital BDC shares are owned by insiders. Comparatively, 1.6% of TriplePoint Venture Growth BDC shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Palmer Square Capital BDC and TriplePoint Venture Growth BDC”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Palmer Square Capital BDC	$124.39 million	2.66	-$3.17 million	($0.11)	-96.51
TriplePoint Venture Growth BDC	$90.93 million	2.33	$49.21 million	$1.23	4.25

TriplePoint Venture Growth BDC has lower revenue, but higher earnings than Palmer Square Capital BDC. Palmer Square Capital BDC is trading at a lower price-to-earnings ratio than TriplePoint Venture Growth BDC, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Palmer Square Capital BDC and TriplePoint Venture Growth BDC’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%
TriplePoint Venture Growth BDC	54.12%	12.04%	5.29%

Volatility and Risk

Palmer Square Capital BDC has a beta of 0.7, indicating that its share price is 30% less volatile than the S&P 500. Comparatively, TriplePoint Venture Growth BDC has a beta of 1.32, indicating that its share price is 32% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Palmer Square Capital BDC and TriplePoint Venture Growth BDC, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Palmer Square Capital BDC	0	4	0	0	2.00
TriplePoint Venture Growth BDC	3	3	0	0	1.50

Palmer Square Capital BDC currently has a consensus target price of $11.75, indicating a potential upside of 10.68%. TriplePoint Venture Growth BDC has a consensus target price of $5.63, indicating a potential upside of 7.66%. Given Palmer Square Capital BDC’s stronger consensus rating and higher possible upside, equities analysts plainly believe Palmer Square Capital BDC is more favorable than TriplePoint Venture Growth BDC.

Summary

TriplePoint Venture Growth BDC beats Palmer Square Capital BDC on 10 of the 15 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 TriplePoint Venture Growth BDC

TriplePoint Venture Growth BDC Corp. is a business development company specializing investments in venture capital-backed companies at the growth stage investments. It also provides debt financing to venture growth space companies which includes growth capital loans, secured and customized loans, equipment financings, revolving loans and direct equity investments. The fund seeks to invest in e-commerce, entertainment, technology and life sciences sector. Within technology the areas of focus include: Security, wireless communication equipments, network system and software, business applications software, conferencing equipments/services .big data, cloud computing, data storage, electronics, energy efficiency, hardware, information services, internet and media, networking, semiconductors, software, software as a service, and other technology related subsectors and within life sciences the areas of focus include: biotechnology, bio fuels/bio mass, diagnostic testing and bioinformatics, drug delivery, drug discovery, healthcare information systems, healthcare services, medical, surgical and therapeutic devices, pharmaceuticals and other life science related subsectors. Within growth capital loans it invests between $5 million and $50 million, for equipment financings it invests between $5 million and $25 million, for revolving loans it invests between $1 million and $25 million, and for direct equity investments it may invest between $0.1 million and $5 million (generally not exceeding 5% of the company’s total equity). The debt financing products are typically structured as lines of credit and it invests through warrants and secured loans. It targeted returns between 10% and 18%. It does not take board seat in the company.