WhiteHorse Finance (NASDAQ:WHF – Get Free Report) and Investcorp Credit Management BDC (NASDAQ:ICMB – Get Free Report) are both small-cap finance companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, profitability, analyst recommendations, institutional ownership, dividends, valuation and earnings.
Dividends
WhiteHorse Finance pays an annual dividend of $1.00 per share and has a dividend yield of 15.5%. Investcorp Credit Management BDC pays an annual dividend of $0.48 per share and has a dividend yield of 17.4%. WhiteHorse Finance pays out 232.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Investcorp Credit Management BDC pays out -4,800.0% of its earnings in the form of a dividend. WhiteHorse Finance has increased its dividend for 3 consecutive years and Investcorp Credit Management BDC has increased its dividend for 1 consecutive years. Investcorp Credit Management BDC is clearly the better dividend stock, given its higher yield and lower payout ratio.
Analyst Recommendations
This is a breakdown of recent recommendations for WhiteHorse Finance and Investcorp Credit Management BDC, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| WhiteHorse Finance | 2 | 3 | 0 | 0 | 1.60 |
| Investcorp Credit Management BDC | 1 | 0 | 0 | 0 | 1.00 |
Risk & Volatility
WhiteHorse Finance has a beta of 0.56, suggesting that its stock price is 44% less volatile than the S&P 500. Comparatively, Investcorp Credit Management BDC has a beta of 0.43, suggesting that its stock price is 57% less volatile than the S&P 500.
Profitability
This table compares WhiteHorse Finance and Investcorp Credit Management BDC’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| WhiteHorse Finance | 12.91% | 9.93% | 4.14% |
| Investcorp Credit Management BDC | -0.30% | 3.33% | 1.19% |
Earnings & Valuation
This table compares WhiteHorse Finance and Investcorp Credit Management BDC”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| WhiteHorse Finance | $92.82 million | 1.62 | $10.85 million | $0.43 | 15.05 |
| Investcorp Credit Management BDC | $23.88 million | 1.67 | -$144,200.00 | ($0.01) | -276.00 |
WhiteHorse Finance has higher revenue and earnings than Investcorp Credit Management BDC. Investcorp Credit Management BDC is trading at a lower price-to-earnings ratio than WhiteHorse Finance, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
13.2% of WhiteHorse Finance shares are held by institutional investors. Comparatively, 7.8% of Investcorp Credit Management BDC shares are held by institutional investors. 2.5% of WhiteHorse Finance shares are held by company insiders. Comparatively, 1.3% of Investcorp Credit Management BDC shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Summary
WhiteHorse Finance beats Investcorp Credit Management BDC on 13 of the 16 factors compared between the two stocks.
About WhiteHorse Finance
WhiteHorse Finance, Inc. is business development company, non-diversified, closed end management company specializing in originating senior secured loans, lower middle market, growth capital industries. It invests in broadline retail, office services and supplies, building products, health care services, health care supplies, research and consulting services, application software, home furnishings, specialized consumer services, data processing and outsourced services, leisure facilities, cable, and satellite. It prefers to invest in United States. It typically invests between $5 million to $25 million in companies having enterprise value of between $50 million and $350 million.
About Investcorp Credit Management BDC
Investcorp Credit Management BDC, Inc. is a business development company specializing in loan, mezzanine, middle market, growth capital, acquisitions, market/product expansion, organic growth, refinancings and recapitalization investments. It also selectively invests in mezzanine loans/structured equity and in the equity of portfolio companies through warrants and other instruments, in most cases taking such upside participation interests as part of a broader investment relationship. The fund typically invests in United States and Europe. Within United States, the fund seeks to invest in Midatlantic, Midwest, Northeast, Southeast, and West Coast regions. The fund primarily invests in cable and satellites; consumer services; healthcare equipment and services; industrials; information technology; telecommunication services; and utilities sectors. The fund seeks to invest between $5 million to $25 million in companies that have annual revenues of at least $50 million with EBITDA at least $15 million.
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