Barings BDC (NYSE:BBDC) and Virtus Investment Partners (NASDAQ:VRTS) are both small-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, analyst recommendations, valuation, profitability, dividends, institutional ownership and earnings.
Institutional and Insider Ownership
57.9% of Barings BDC shares are owned by institutional investors. Comparatively, 99.2% of Virtus Investment Partners shares are owned by institutional investors. 3.5% of Barings BDC shares are owned by company insiders. Comparatively, 4.8% of Virtus Investment Partners shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
This is a breakdown of recent ratings and recommmendations for Barings BDC and Virtus Investment Partners, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Virtus Investment Partners||0||4||1||0||2.20|
Barings BDC presently has a consensus price target of $13.00, suggesting a potential upside of 31.18%. Virtus Investment Partners has a consensus price target of $129.20, suggesting a potential upside of 35.33%. Given Virtus Investment Partners’ higher possible upside, analysts plainly believe Virtus Investment Partners is more favorable than Barings BDC.
Barings BDC pays an annual dividend of $0.12 per share and has a dividend yield of 1.2%. Virtus Investment Partners pays an annual dividend of $2.20 per share and has a dividend yield of 2.3%. Barings BDC pays out 7.7% of its earnings in the form of a dividend. Virtus Investment Partners pays out 28.6% 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.
This table compares Barings BDC and Virtus Investment Partners’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Virtus Investment Partners||14.55%||19.05%||3.71%|
Earnings & Valuation
This table compares Barings BDC and Virtus Investment Partners’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Barings BDC||$123.00 million||4.13||-$28.65 million||$1.55||6.39|
|Virtus Investment Partners||$425.61 million||1.60||$37.01 million||$7.68||12.43|
Virtus Investment Partners has higher revenue and earnings than Barings BDC. Barings BDC is trading at a lower price-to-earnings ratio than Virtus Investment Partners, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
Barings BDC has a beta of 0.7, suggesting that its stock price is 30% less volatile than the S&P 500. Comparatively, Virtus Investment Partners has a beta of 1.4, suggesting that its stock price is 40% more volatile than the S&P 500.
Virtus Investment Partners beats Barings BDC on 12 of the 15 factors compared between the two stocks.
About Barings BDC
Barings BDC, Inc. (NYSE:BBDC) is a business development company specializing in private equity and mezzanine investments. It focuses on leveraged buyouts, management buyouts, ESOPs, change of control transactions, acquisition financings, growth financing, and recapitalizations in lower middle market, mature, and later stage companies. The firm prefers to make investments in many business sectors including manufacturing, distribution, transportation, energy, communications, health services, restaurants, media, and others. It primarily invests in companies located throughout the United States, with an emphasis on the Southeast and Midatlantic. The firm makes equity investments between $1 million and $25 million and debt investments between $5 million and $30 million per transaction, in companies having annual revenues between $20 million and $200 million and EBITDA between $3 million and $35 million and can also co-invest. It typically makes investments between $5 million and $35 million. It primarily invests in senior subordinated debt securities secured by second lien security interests in portfolio company assets, coupled with equity interests. The firm also invests in senior debt securities secured by first lien security interests in portfolio companies. Triangle Capital Corporation was incorporated on October 10, 2006 and is based in Raleigh, North Carolina.
About Virtus Investment Partners
Virtus Investment Partners, Inc. is a publicly owned investment manager. The firm primarily provides its services to individual and institutional clients. It launches separate client focused equity and fixed income portfolios. The firm launches equity, fixed income, and balanced mutual funds for its clients. It invests in the public equity, fixed income, and real estate markets. The firm also invests in exchange traded funds. It employs a multi manager approach for its products. The firm employs quantitative analysis to make its investments. It benchmarks the performance of its portfolios against the S&P 500 Index. The firm conducts in-house research to make its investments. Virtus Investment Partners, Inc. was founded in 1988 and is based in Hartford, Connecticut.
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