GSV Capital Corp (NASDAQ: GSVC) and Golub Capital BDC (NASDAQ:GBDC) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, profitability, institutional ownership, valuation, dividends, analyst recommendations and risk.

Analyst Recommendations

This is a breakdown of recent ratings for GSV Capital Corp and Golub Capital BDC, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
GSV Capital Corp 0 1 0 0 2.00
Golub Capital BDC 0 3 0 0 2.00

Golub Capital BDC has a consensus target price of $19.33, indicating a potential upside of 3.00%. Given Golub Capital BDC’s higher probable upside, analysts plainly believe Golub Capital BDC is more favorable than GSV Capital Corp.

Institutional and Insider Ownership

29.7% of GSV Capital Corp shares are owned by institutional investors. Comparatively, 41.6% of Golub Capital BDC shares are owned by institutional investors. 0.7% of GSV Capital Corp shares are owned by company insiders. Comparatively, 2.4% of Golub Capital BDC shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

Golub Capital BDC pays an annual dividend of $1.28 per share and has a dividend yield of 6.8%. GSV Capital Corp does not pay a dividend. Golub Capital BDC pays out 96.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares GSV Capital Corp and Golub Capital BDC’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
GSV Capital Corp -1,701.22% -5.43% -3.25%
Golub Capital BDC 53.62% 7.86% 3.95%

Volatility and Risk

GSV Capital Corp has a beta of 1.29, suggesting that its stock price is 29% more volatile than the S&P 500. Comparatively, Golub Capital BDC has a beta of 0.68, suggesting that its stock price is 32% less volatile than the S&P 500.

Valuation and Earnings

This table compares GSV Capital Corp and Golub Capital BDC’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
GSV Capital Corp N/A N/A N/A ($1.09) -5.11
Golub Capital BDC N/A N/A N/A $1.33 14.11

GSV Capital Corp is trading at a lower price-to-earnings ratio than Golub Capital BDC, indicating that it is currently the more affordable of the two stocks.

Summary

Golub Capital BDC beats GSV Capital Corp on 8 of the 10 factors compared between the two stocks.

GSV Capital Corp Company Profile

GSV Capital Corp. (GSV Capital) is an externally managed, non-diversified closed-end management investment company. The Company’s investment objective is to maximize its portfolio’s total return, principally by seeking capital gains on its equity and equity-related investments. The Company invests principally in the equity securities, which are venture-capital-backed emerging companies. The Company acquires its investments through direct investments with portfolio companies, secondary marketplaces for private companies and negotiations with selling stockholders. The Company may also invest in select publicly traded equity securities or certain non-United States companies that otherwise meet its investment criteria. It seeks to invest approximately 90% of its portfolio in late-stage companies and the remaining approximately 10% in emerging companies that fit within its targeted areas. Its investment activities are managed by its investment advisor, GSV Asset Management, LLC.

Golub Capital BDC Company Profile

Golub Capital BDC, Inc. is an externally managed, non-diversified, closed-end, management investment company. The Company’s investment objective is to generate current income and capital appreciation by investing primarily in senior secured and one stop loans of the United States middle-market companies. It may also selectively invest in second lien and subordinated loans of, and warrants and minority equity securities in the United States middle-market companies. The Company seeks to create a portfolio that includes primarily senior secured and one stop loans by primarily investing in the securities of the United States middle-market companies. It generally invests in securities that have been rated below investment grade by independent rating agencies or that would be rated below investment grade if they were rated. The Company’s investment activities are managed by its investment advisor, GC Advisors LLC (GC Advisors).

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