Analyzing Blackrock Tcp Capital (NASDAQ:TCPC) & Kayne Anderson BDC (NYSE:KBDC)
by Danessa Lincoln · The Markets DailyKayne Anderson BDC (NYSE:KBDC – Get Free Report) and Blackrock Tcp Capital (NASDAQ:TCPC – Get Free Report) are both small-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their institutional ownership, valuation, risk, analyst recommendations, profitability, dividends and earnings.
Profitability
This table compares Kayne Anderson BDC and Blackrock Tcp Capital’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Kayne Anderson BDC | 37.30% | 10.47% | 5.14% |
| Blackrock Tcp Capital | -66.92% | 14.30% | 5.47% |
Earnings & Valuation
This table compares Kayne Anderson BDC 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 | |
| Kayne Anderson BDC | $235.82 million | 3.79 | $93.71 million | $1.28 | 10.52 |
| Blackrock Tcp Capital | $201.79 million | 1.31 | -$88.93 million | ($1.49) | -2.12 |
Kayne Anderson BDC has higher revenue and earnings than Blackrock Tcp Capital. Blackrock Tcp Capital is trading at a lower price-to-earnings ratio than Kayne Anderson BDC, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a summary of current recommendations and price targets for Kayne Anderson BDC and Blackrock Tcp Capital, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Kayne Anderson BDC | 0 | 2 | 2 | 0 | 2.50 |
| Blackrock Tcp Capital | 3 | 1 | 0 | 0 | 1.25 |
Kayne Anderson BDC currently has a consensus target price of $15.12, suggesting a potential upside of 12.36%. Blackrock Tcp Capital has a consensus target price of $3.50, suggesting a potential upside of 10.76%. Given Kayne Anderson BDC’s stronger consensus rating and higher possible upside, research analysts plainly believe Kayne Anderson BDC is more favorable than Blackrock Tcp Capital.
Risk & Volatility
Kayne Anderson BDC has a beta of 0.3, meaning that its stock price is 70% less volatile than the S&P 500. Comparatively, Blackrock Tcp Capital has a beta of 0.95, meaning that its stock price is 5% less volatile than the S&P 500.
Dividends
Kayne Anderson BDC pays an annual dividend of $1.60 per share and has a dividend yield of 11.9%. Blackrock Tcp Capital pays an annual dividend of $0.68 per share and has a dividend yield of 21.5%. Kayne Anderson BDC pays out 125.0% 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. Blackrock Tcp Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.
Summary
Kayne Anderson BDC beats Blackrock Tcp Capital on 9 of the 14 factors compared between the two stocks.
About Kayne Anderson BDC
Kayne Anderson BDC Inc. is a business development company which invests primarily in first lien senior secured loans, with a secondary focus on unitranche and split-lien loans to middle market companies. Kayne Anderson BDC Inc. is based in CHICAGO.
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.