Head-To-Head Analysis: Barings Bdc (NYSE:BBDC) & Investcorp Credit Management BDC (NASDAQ:ICMB)

Barings Bdc (NYSE:BBDC) and Investcorp Credit Management BDC (NASDAQ:ICMB) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, earnings, analyst recommendations, valuation, institutional ownership, dividends and risk.

Dividends

Barings Bdc pays an annual dividend of $1.04 per share and has a dividend yield of 11.6%. Investcorp Credit Management BDC pays an annual dividend of $0.48 per share and has a dividend yield of 17.4%. Barings Bdc pays out 110.6% 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 109.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Barings Bdc has raised its dividend for 3 consecutive years and Investcorp Credit Management BDC has raised its dividend for 1 consecutive years. Investcorp Credit Management BDC is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Barings Bdc and Investcorp Credit Management BDC’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Barings Bdc	35.21%	10.74%	4.80%
Investcorp Credit Management BDC	29.82%	6.51%	2.50%

Analyst Recommendations

This is a breakdown of recent recommendations for Barings Bdc and Investcorp Credit Management BDC, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Barings Bdc	0	1	2	0	2.67
Investcorp Credit Management BDC	0	0	0	0	0.00

Barings Bdc currently has a consensus target price of $9.67, indicating a potential upside of 7.41%. Given Barings Bdc’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Barings Bdc is more favorable than Investcorp Credit Management BDC.

Institutional & Insider Ownership

44.1% of Barings Bdc shares are held by institutional investors. Comparatively, 7.8% of Investcorp Credit Management BDC shares are held by institutional investors. 0.5% of Barings Bdc shares are held by insiders. Comparatively, 1.2% of Investcorp Credit Management BDC shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Barings Bdc and Investcorp Credit Management BDC”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Barings Bdc	$286.17 million	3.32	$110.29 million	$0.94	9.57
Investcorp Credit Management BDC	$23.88 million	1.67	-$4.09 million	$0.44	6.27

Barings Bdc has higher revenue and earnings than Investcorp Credit Management BDC. Investcorp Credit Management BDC is trading at a lower price-to-earnings ratio than Barings Bdc, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Barings Bdc has a beta of 0.71, meaning that its share price is 29% less volatile than the S&P 500. Comparatively, Investcorp Credit Management BDC has a beta of 0.77, meaning that its share price is 23% less volatile than the S&P 500.

Summary

Barings Bdc beats Investcorp Credit Management BDC on 13 of the 17 factors compared between the two stocks.

About Barings Bdc

Barings BDC, Inc. is a publicly traded, externally managed investment company that has elected to be treated as a business development company under the Investment Company Act of 1940. It seeks to invest primarily in senior secured loans, first lien debt, unitranche, second lien debt, subordinated debt, equity co-investments and senior secured private debt investments in private middle-market companies that operate across a wide range of industries. It specializes in mezzanine, leveraged buyouts, management buyouts, ESOPs, change of control transactions, acquisition financings, growth financing, and recapitalizations in lower middle market, mature, and later stage companies. It invests in manufacturing and distribution; business services and technology; transportation and logistics; consumer product and services. It invests in United States. It invests in companies with EBITDA of $10 million to $75 million, typically in private equity sponsor backed.

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.