TCG BDC INC (NASDAQ: CGBD) and NewStar Financial (NASDAQ:NEWS) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their dividends, institutional ownership, risk, earnings, profitability, analyst recommendations and valuation.
This table compares TCG BDC INC and NewStar Financial’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|TCG BDC INC||N/A||N/A||N/A|
This is a breakdown of recent ratings and target prices for TCG BDC INC and NewStar Financial, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|TCG BDC INC||0||0||4||0||3.00|
TCG BDC INC currently has a consensus target price of $19.13, indicating a potential upside of 4.17%. NewStar Financial has a consensus target price of $11.00, indicating a potential upside of 5.06%. Given NewStar Financial’s higher possible upside, analysts clearly believe NewStar Financial is more favorable than TCG BDC INC.
Institutional and Insider Ownership
1.6% of TCG BDC INC shares are owned by institutional investors. Comparatively, 73.7% of NewStar Financial shares are owned by institutional investors. 0.1% of TCG BDC INC shares are owned by company insiders. Comparatively, 8.1% of NewStar Financial shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Valuation & Earnings
This table compares TCG BDC INC and NewStar Financial’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|TCG BDC INC||N/A||N/A||N/A||N/A||N/A|
|NewStar Financial||$95.31 million||4.57||$22.88 million||$0.55||19.04|
NewStar Financial has higher revenue and earnings than TCG BDC INC.
TCG BDC INC pays an annual dividend of $1.48 per share and has a dividend yield of 8.1%. NewStar Financial pays an annual dividend of $0.08 per share and has a dividend yield of 0.8%. NewStar Financial pays out 14.5% of its earnings in the form of a dividend.
NewStar Financial beats TCG BDC INC on 7 of the 11 factors compared between the two stocks.
TCG BDC INC Company Profile
TCG BDC, Inc., formerly Carlyle GMS Finance, Inc., is a managed and non-diversified closed-end investment company. The Company is focused on lending to middle market companies. The Company’s investment objective is to generate current income and capital appreciation primarily through debt investments in the United States and middle market companies. The Company seeks to achieve its investment objective primarily through direct originations of secured debt, including first lien senior secured loans and second lien senior secured loans. The Company’s first lien senior secured loans include stand-alone first lien loans, first lien/last out loans, and unitranche loans. Second lien senior secured loans (Middle Market Senior Loans), with the balance of its assets invested yielding in higher investments include unsecured debt, mezzanine debt and investments in equities. The Company’s investment adviser is Carlyle GMS Investment Management L.L.C.
NewStar Financial Company Profile
NewStar Financial, Inc. (NewStar) is a commercial finance company. The Company operates through two segments: Commercial Lending and Asset Management. The Commercial Lending segment represents its direct lending activities, which are focused on providing a range of flexible senior secured debt options to mid-sized companies. The Asset Management segment represents its investment advisory activities, which are focused on providing opportunities for qualified investors to invest in a range of credit funds managed by the Company. The Company’s direct lending activities are focused on meeting the financial needs of companies and private investors in the middle market by offering a range of debt financing options. Through its asset management platforms, NewStar offers a range of investment products employing credit-oriented strategies focused on middle market loans and liquid, tradeable credit.
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