Ridgepost Capital (NYSE:RPC) vs. Sixth Street Specialty Lending (NYSE:TSLX) Head-To-Head Contrast

Sixth Street Specialty Lending (NYSE:TSLX) and Ridgepost Capital (NYSE:RPC) are both small-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, analyst recommendations, risk, dividends, institutional ownership, earnings and profitability.

Risk & Volatility

Sixth Street Specialty Lending has a beta of 0.62, meaning that its share price is 38% less volatile than the S&P 500. Comparatively, Ridgepost Capital has a beta of 0.89, meaning that its share price is 11% less volatile than the S&P 500.

Institutional and Insider Ownership

70.3% of Sixth Street Specialty Lending shares are held by institutional investors. Comparatively, 48.0% of Ridgepost Capital shares are held by institutional investors. 3.8% of Sixth Street Specialty Lending shares are held by company insiders. Comparatively, 11.8% of Ridgepost Capital shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Sixth Street Specialty Lending and Ridgepost Capital”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sixth Street Specialty Lending	$132.14 million	12.10	$209.99 million	$0.95	17.71
Ridgepost Capital	$297.35 million	3.17	$19.50 million	$0.25	34.22

Sixth Street Specialty Lending has higher earnings, but lower revenue than Ridgepost Capital. Sixth Street Specialty Lending is trading at a lower price-to-earnings ratio than Ridgepost Capital, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current ratings and price targets for Sixth Street Specialty Lending and Ridgepost Capital, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sixth Street Specialty Lending	0	3	5	0	2.62
Ridgepost Capital	0	2	2	0	2.50

Sixth Street Specialty Lending currently has a consensus price target of $19.83, indicating a potential upside of 17.88%. Ridgepost Capital has a consensus price target of $13.00, indicating a potential upside of 51.96%. Given Ridgepost Capital’s higher probable upside, analysts clearly believe Ridgepost Capital is more favorable than Sixth Street Specialty Lending.

Profitability

This table compares Sixth Street Specialty Lending and Ridgepost Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sixth Street Specialty Lending	21.79%	11.33%	5.16%
Ridgepost Capital	9.03%	21.02%	9.21%

Dividends

Sixth Street Specialty Lending pays an annual dividend of $1.68 per share and has a dividend yield of 10.0%. Ridgepost Capital pays an annual dividend of $0.16 per share and has a dividend yield of 1.9%. Sixth Street Specialty Lending pays out 176.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Ridgepost Capital pays out 64.0% of its earnings in the form of a dividend.

Summary

Sixth Street Specialty Lending beats Ridgepost Capital on 9 of the 16 factors compared between the two stocks.

About Sixth Street Specialty Lending

Sixth Street Specialty Lending, Inc. (NYSE: TSLX) is a business development company. The fund provides senior secured loans (first-lien, second-lien, and unitranche), unsecured loans, mezzanine debt, and investments in corporate bonds and equity securities and structured products, non-control structured equity, and common equity with a focus on co-investments for organic growth, acquisitions, market or product expansion, restructuring initiatives, recapitalizations, and refinancing. The fund invests in business services, software & technology, healthcare, energy, consumer & retail, manufacturing, industrials, royalty related businesses, education, and specialty finance. It seeks to finance and lending to middle market companies principally located in the United States. The fund invests in companies with enterprise value between $50 million and $1 billion or more and EBITDA between $10 million and $250 million. The transaction size is between $15 million and $350 million. The fund invests across the spectrum of the capital structure and can arrange syndicated transactions of up to $500 million and hold sizeable positions within its credits.

About Ridgepost Capital

P10, Inc., together with its subsidiaries, operates as a multi-asset class private market solutions provider in the alternative asset management industry in the United States. The company offers private equity, venture capital, private credit, impact investing, and private credit services, as well as primary fund of funds, secondary investment, and direct and co-investments services. It also provides tax credit transaction and consulting services. The company was founded in 1992 and is headquartered in Dallas, Texas.