Garrison Capital (NASDAQ: GARS) and Goldman Sachs BDC (NYSE:GSBD) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, valuation, dividends, profitability, earnings, analyst recommendations and risk.

Institutional and Insider Ownership

22.0% of Garrison Capital shares are held by institutional investors. Comparatively, 36.7% of Goldman Sachs BDC shares are held by institutional investors. 5.8% of Garrison Capital shares are held by company insiders. Comparatively, 0.3% of Goldman Sachs BDC shares are held by company 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 Ratings

This is a breakdown of current recommendations for Garrison Capital and Goldman Sachs BDC, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Garrison Capital 0 5 1 0 2.17
Goldman Sachs BDC 1 4 3 0 2.25

Garrison Capital presently has a consensus target price of $10.17, indicating a potential upside of 22.64%. Goldman Sachs BDC has a consensus target price of $22.18, indicating a potential upside of 3.79%. Given Garrison Capital’s higher probable upside, analysts plainly believe Garrison Capital is more favorable than Goldman Sachs BDC.

Earnings & Valuation

This table compares Garrison Capital and Goldman Sachs BDC’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Garrison Capital N/A N/A N/A N/A N/A
Goldman Sachs BDC N/A N/A N/A $1.29 16.57

Dividends

Garrison Capital pays an annual dividend of $1.12 per share and has a dividend yield of 13.5%. Goldman Sachs BDC pays an annual dividend of $1.80 per share and has a dividend yield of 8.4%. Goldman Sachs BDC pays out 139.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Risk and Volatility

Garrison Capital has a beta of 0.24, meaning that its stock price is 76% less volatile than the S&P 500. Comparatively, Goldman Sachs BDC has a beta of 0.85, meaning that its stock price is 15% less volatile than the S&P 500.

Profitability

This table compares Garrison Capital and Goldman Sachs BDC’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Garrison Capital -0.38% 8.33% 3.97%
Goldman Sachs BDC 35.73% 11.54% 6.67%

Summary

Goldman Sachs BDC beats Garrison Capital on 7 of the 11 factors compared between the two stocks.

About Garrison Capital

Garrison Capital Inc. is a managed, closed-end, non-diversified management investment company. The Company’s investment objective is to generate current income and capital appreciation by making investments primarily in debt securities and loans of the United States-based middle-market companies, which it defines as those having annual earnings before interest, taxes and depreciation, or EBITDA, of certain amount. It invests or provides direct lending in first lien senior secured loans, second lien senior secured loans, one-stop senior secured loans or unitranche loans, subordinated or mezzanine loans, unsecured consumer loans and to a lesser extent, selected equity co-investments in middle-market companies. The Company intends to generate risk-adjusted net returns by assembling a portfolio of investments. The Company’s investment advisor is Garrison Capital Advisers LLC.

About Goldman Sachs BDC

Goldman Sachs BDC, Inc. is a closed-end management investment company. The Company is a specialty finance company, which is focused on lending to middle-market companies. The Company’s investment objective is to generate current income and, to a lesser extent, capital appreciation primarily through direct originations of secured debt, including first lien, including first lien, unitranche, including last out portions of such loans, and second lien debt, and unsecured debt, including mezzanine debt, as well as through select equity investments. The Company invests primarily in the United States middle-market companies. The Company invests in illiquid securities, including debt and equity investments, of middle-market companies. As of December 31, 2016, its portfolio included first lien/senior secured debt, first lien/last-out unitranche, second lien/senior secured debt, unsecured debt, preferred stock, common stock, and investment funds and vehicles.

Receive News & Ratings for Garrison Capital Inc. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Garrison Capital Inc. and related companies with MarketBeat.com's FREE daily email newsletter.