Golub Capital BDC (NASDAQ:GBDC) and MSC Income Fund (NYSE:MSIF) Critical Survey

MSC Income Fund (NYSE:MSIF) and Golub Capital BDC (NASDAQ:GBDC) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their risk, analyst recommendations, dividends, institutional ownership, earnings, valuation and profitability.

Profitability

This table compares MSC Income Fund and Golub Capital BDC’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MSC Income Fund	N/A	N/A	N/A
Golub Capital BDC	21.45%	9.91%	4.39%

Institutional & Insider Ownership

42.4% of Golub Capital BDC shares are owned by institutional investors. 1.4% of Golub Capital BDC shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Earnings and Valuation

This table compares MSC Income Fund and Golub Capital BDC”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MSC Income Fund	$110.26 million	5.37	-$155,544.55	($0.00)	-3,808.43
Golub Capital BDC	$870.78 million	3.73	$376.65 million	$0.65	19.24

Golub Capital BDC has higher revenue and earnings than MSC Income Fund. MSC Income Fund is trading at a lower price-to-earnings ratio than Golub Capital BDC, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings for MSC Income Fund and Golub Capital BDC, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MSC Income Fund	0	3	2	1	2.67
Golub Capital BDC	0	2	4	1	2.86

MSC Income Fund presently has a consensus target price of $13.88, suggesting a potential upside of 10.43%. Golub Capital BDC has a consensus target price of $13.90, suggesting a potential upside of 11.16%. Given Golub Capital BDC’s stronger consensus rating and higher possible upside, analysts plainly believe Golub Capital BDC is more favorable than MSC Income Fund.

Summary

Golub Capital BDC beats MSC Income Fund on 12 of the 13 factors compared between the two stocks.

About Golub Capital BDC

Golub Capital BDC, Inc. (GBDC) is a business development company and operates as an externally managed closed-end non-diversified management investment company. It invests in debt and minority equity investments in middle-market companies that are, in most cases, sponsored by private equity investors. It typically invests in diversified consumer services, automobiles, healthcare technology, insurance, health care equipment and supplies, hotels, restaurants and leisure, healthcare providers and services, IT services and specialty retails. It seeks to invest in the United States. It primarily invests in first lien traditional senior debt, first lien one stop, junior debt and equity, senior secured, one stop, unitranche, second lien, subordinated and mezzanine loans of middle-market companies, and warrants.