Critical Analysis: Crescent Capital BDC (NASDAQ:CCAP) versus Raymond James Financial (NYSE:RJF)

Raymond James Financial (NYSE:RJF) and Crescent Capital BDC (NASDAQ:CCAP) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their valuation, institutional ownership, earnings, risk, profitability, analyst recommendations and dividends.

Profitability

This table compares Raymond James Financial and Crescent Capital BDC’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Raymond James Financial	13.50%	19.52%	2.69%
Crescent Capital BDC	-0.10%	8.66%	3.63%

Dividends

Raymond James Financial pays an annual dividend of $2.16 per share and has a dividend yield of 1.3%. Crescent Capital BDC pays an annual dividend of $1.36 per share and has a dividend yield of 13.1%. Raymond James Financial pays out 18.1% of its earnings in the form of a dividend. Crescent Capital BDC pays out -1,511.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Raymond James Financial has increased its dividend for 3 consecutive years and Crescent Capital BDC has increased its dividend for 1 consecutive years. Crescent Capital BDC is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility & Risk

Raymond James Financial has a beta of 0.94, meaning that its stock price is 6% less volatile than the S&P 500. Comparatively, Crescent Capital BDC has a beta of 0.56, meaning that its stock price is 44% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and price targets for Raymond James Financial and Crescent Capital BDC, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Raymond James Financial	0	9	6	0	2.40
Crescent Capital BDC	0	6	1	0	2.14

Raymond James Financial currently has a consensus price target of $181.46, indicating a potential upside of 7.99%. Crescent Capital BDC has a consensus price target of $12.25, indicating a potential upside of 18.02%. Given Crescent Capital BDC’s higher possible upside, analysts plainly believe Crescent Capital BDC is more favorable than Raymond James Financial.

Valuation and Earnings

This table compares Raymond James Financial and Crescent Capital BDC”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Raymond James Financial	$17.54 billion	1.84	$2.37 billion	$11.92	14.10
Crescent Capital BDC	$167.29 million	2.29	$34.51 million	($0.09)	-115.33

Raymond James Financial has higher revenue and earnings than Crescent Capital BDC. Crescent Capital BDC is trading at a lower price-to-earnings ratio than Raymond James Financial, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

83.8% of Raymond James Financial shares are held by institutional investors. Comparatively, 49.5% of Crescent Capital BDC shares are held by institutional investors. 0.6% of Raymond James Financial shares are held by insiders. Comparatively, 1.2% of Crescent Capital BDC shares are held 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.

Summary

Raymond James Financial beats Crescent Capital BDC on 11 of the 17 factors compared between the two stocks.

About Raymond James Financial

Raymond James Financial, Inc. is a diversified financial services company that provides wealth management, investment banking, asset management and banking services. Through its financial advisors and related businesses, it serves individuals, families, businesses and institutions. The company offers financial planning, investment advisory and brokerage services, along with corporate finance, equity and fixed-income capital markets services. Its asset management business provides investment strategies and portfolio solutions, while Raymond James Bank offers banking and lending services.

About Crescent Capital BDC

Crescent Capital BDC, Inc. is a business development company that provides financing to middle-market companies. The company seeks to generate current income and, to a lesser extent, capital appreciation by investing in privately negotiated debt and equity securities. Its investment portfolio is focused primarily on senior secured loans, including first-lien and second-lien loans, as well as other debt investments and selected equity interests. Crescent Capital BDC generally works with established companies across a range of industries, providing capital for acquisitions, recapitalizations, refinancing, growth initiatives and other corporate purposes.