Blackrock Tcp Capital (NASDAQ:TCPC) & Bain Capital Specialty Finance (NYSE:BCSF) Head-To-Head Analysis

Blackrock Tcp Capital (NASDAQ:TCPC) and Bain Capital Specialty Finance (NYSE:BCSF) are both small-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, dividends, risk, institutional ownership, earnings, analyst recommendations and profitability.

Risk and Volatility

Blackrock Tcp Capital has a beta of 0.93, indicating that its stock price is 7% less volatile than the S&P 500. Comparatively, Bain Capital Specialty Finance has a beta of 0.57, indicating that its stock price is 43% less volatile than the S&P 500.

Earnings & Valuation

This table compares Blackrock Tcp Capital and Bain Capital Specialty Finance”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Blackrock Tcp Capital	$201.79 million	1.55	-$88.93 million	($1.49)	-2.50
Bain Capital Specialty Finance	$273.24 million	3.04	$98.76 million	$1.14	11.23

Bain Capital Specialty Finance has higher revenue and earnings than Blackrock Tcp Capital. Blackrock Tcp Capital is trading at a lower price-to-earnings ratio than Bain Capital Specialty Finance, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings for Blackrock Tcp Capital and Bain Capital Specialty Finance, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Blackrock Tcp Capital	3	1	0	0	1.25
Bain Capital Specialty Finance	0	2	1	0	2.33

Blackrock Tcp Capital currently has a consensus price target of $3.50, indicating a potential downside of 6.17%. Bain Capital Specialty Finance has a consensus price target of $14.00, indicating a potential upside of 9.40%. Given Bain Capital Specialty Finance’s stronger consensus rating and higher probable upside, analysts plainly believe Bain Capital Specialty Finance is more favorable than Blackrock Tcp Capital.

Profitability

This table compares Blackrock Tcp Capital and Bain Capital Specialty Finance’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Blackrock Tcp Capital	-66.92%	14.30%	5.47%
Bain Capital Specialty Finance	27.00%	10.44%	4.35%

Dividends

Blackrock Tcp Capital pays an annual dividend of $0.68 per share and has a dividend yield of 18.2%. Bain Capital Specialty Finance pays an annual dividend of $1.68 per share and has a dividend yield of 13.1%. Blackrock Tcp Capital pays out -45.6% of its earnings in the form of a dividend. Bain Capital Specialty Finance pays out 147.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Bain Capital Specialty Finance has increased its dividend for 4 consecutive years. Blackrock Tcp Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Bain Capital Specialty Finance beats Blackrock Tcp Capital on 10 of the 15 factors compared between the two stocks.

About Blackrock Tcp Capital

BlackRock TCP Capital Corp. is a business development company specializing in direct equity and debt investments in middle-market, small businesses, debt securities, senior secured loans, junior loans, originated loans, mezzanine, senior debt instruments, bonds, and secondary-market investments. It typically invests in communication services, public relations services, television, wireless telecommunication services, apparel, textile mills, restaurants, retailing, energy, oil and gas extraction, Patent owners and Lessors, Federal and Federally- Sponsored Credit agencies, insurance, hospital and healthcare centers, Biotechnology, engineering services, heavy electrical equipment, tax accounting, scientific and related consulting services, charter freight air transportation, Information technology consulting, application hosting services, software diagram and design, computer aided design, communication equipment, electronics manufacturing equipment, computer components, chemicals. It seeks to invest in the United States. The fund typically invests between $10 million and $35 million in companies with enterprise values between $100 million and $1500 million including complex situations. It prefers to make equity investments in companies for an ownership stake.

About Bain Capital Specialty Finance

Bain Capital Specialty Finance, Inc. is business development company specializing in direct loans to middle-market companies. The fund seeks to invest in senior investments with a first or second lien on collateral, senior first lien, stretch senior, senior second lien, unitranche, mezzanine debt, junior securities, other junior investments, and secondary purchases of assets or portfolios that primarily consist of middle-market corporate debt. It typically invests in companies with EBITDA between $10 million and $150 million.