Bain Capital Specialty Finance (NYSE:BCSF) versus Blackrock Tcp Capital (NASDAQ:TCPC) Head to Head Survey
by Renee Jackson · The Cerbat GemBain Capital Specialty Finance (NYSE:BCSF – Get Free Report) and Blackrock Tcp Capital (NASDAQ:TCPC – Get Free Report) are both small-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitability, valuation, risk, dividends, institutional ownership, analyst recommendations and earnings.
Dividends
Bain Capital Specialty Finance pays an annual dividend of $1.68 per share and has a dividend yield of 12.5%. Blackrock Tcp Capital pays an annual dividend of $0.68 per share and has a dividend yield of 17.7%. 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. Blackrock Tcp Capital pays out -45.6% of its earnings in the form of a dividend. Bain Capital Specialty Finance has raised its dividend for 4 consecutive years. Blackrock Tcp Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.
Earnings and Valuation
This table compares Bain Capital Specialty Finance and Blackrock Tcp Capital”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Bain Capital Specialty Finance | $273.24 million | 3.18 | $98.76 million | $1.14 | 11.75 |
| Blackrock Tcp Capital | -$112.61 million | -2.86 | -$88.93 million | ($1.49) | -2.57 |
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.
Profitability
This table compares Bain Capital Specialty Finance and Blackrock Tcp Capital’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Bain Capital Specialty Finance | 27.00% | 10.44% | 4.35% |
| Blackrock Tcp Capital | -66.92% | 14.30% | 5.47% |
Volatility and Risk
Bain Capital Specialty Finance has a beta of 0.59, suggesting that its share price is 41% less volatile than the S&P 500. Comparatively, Blackrock Tcp Capital has a beta of 0.98, suggesting that its share price is 2% less volatile than the S&P 500.
Analyst Ratings
This is a summary of recent ratings and price targets for Bain Capital Specialty Finance and Blackrock Tcp Capital, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Bain Capital Specialty Finance | 0 | 2 | 1 | 0 | 2.33 |
| Blackrock Tcp Capital | 3 | 1 | 0 | 0 | 1.25 |
Bain Capital Specialty Finance presently has a consensus target price of $14.00, suggesting a potential upside of 4.49%. Blackrock Tcp Capital has a consensus target price of $3.50, suggesting a potential downside of 8.74%. Given Bain Capital Specialty Finance’s stronger consensus rating and higher possible upside, equities analysts clearly believe Bain Capital Specialty Finance is more favorable than Blackrock Tcp Capital.
Summary
Bain Capital Specialty Finance beats Blackrock Tcp Capital on 10 of the 15 factors compared between the two stocks.
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.
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.