Critical Review: THUNDER BRDG AC/SH SH (NASDAQ:TBRG) and Bain Capital Specialty Finance (NASDAQ:BCSF)

THUNDER BRDG AC/SH SH (NASDAQ:TBRG) and Bain Capital Specialty Finance (NYSE:BCSF) are both small-cap unclassified companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, dividends, valuation, analyst recommendations, institutional ownership, risk and profitability.

Dividends

Bain Capital Specialty Finance pays an annual dividend of $1.64 per share and has a dividend yield of 8.7%. THUNDER BRDG AC/SH SH does not pay a dividend. Bain Capital Specialty Finance pays out 113.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Insider and Institutional Ownership

80.4% of THUNDER BRDG AC/SH SH shares are held by institutional investors. Comparatively, 35.1% of Bain Capital Specialty Finance shares are held by institutional investors. 0.2% of Bain Capital Specialty Finance 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.

Analyst Recommendations

This is a breakdown of current recommendations for THUNDER BRDG AC/SH SH and Bain Capital Specialty Finance, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
THUNDER BRDG AC/SH SH 0 0 2 0 3.00
Bain Capital Specialty Finance 0 2 3 0 2.60

THUNDER BRDG AC/SH SH currently has a consensus price target of $15.00, suggesting a potential upside of ∞. Bain Capital Specialty Finance has a consensus price target of $20.25, suggesting a potential upside of 7.37%. Given THUNDER BRDG AC/SH SH’s stronger consensus rating and higher possible upside, research analysts clearly believe THUNDER BRDG AC/SH SH is more favorable than Bain Capital Specialty Finance.

Profitability

This table compares THUNDER BRDG AC/SH SH and Bain Capital Specialty Finance’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
THUNDER BRDG AC/SH SH N/A 1.03% 0.99%
Bain Capital Specialty Finance 44.83% 8.27% 4.09%

Valuation & Earnings

This table compares THUNDER BRDG AC/SH SH and Bain Capital Specialty Finance’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
THUNDER BRDG AC/SH SH N/A N/A $1.52 million ($0.14) N/A
Bain Capital Specialty Finance $99.29 million 9.81 $26.65 million $1.45 13.01

Bain Capital Specialty Finance has higher revenue and earnings than THUNDER BRDG AC/SH SH. THUNDER BRDG AC/SH SH 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.

Summary

Bain Capital Specialty Finance beats THUNDER BRDG AC/SH SH on 10 of the 14 factors compared between the two stocks.

THUNDER BRDG AC/SH SH Company Profile

Thunder Bridge Acquisition, Ltd. intends to acquire assets and businesses through a merger, share exchange, share purchase, reorganization, or business combination. The company was founded in 2017 and is based in Great Falls, Virginia.

Bain Capital Specialty Finance Company Profile

Bain Capital Specialty Finance, Inc. operates as a business development company (BDC) 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.

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