Critical Review: Goldman Sachs BDC (GSBD) and The Competition
Goldman Sachs BDC (NYSE: GSBD) is one of 55 publicly-traded companies in the “Investment Management & Fund Operators” industry, but how does it contrast to its rivals? We will compare Goldman Sachs BDC to related companies based on the strength of its dividends, institutional ownership, valuation, profitability, risk, analyst recommendations and earnings.
This table compares Goldman Sachs BDC and its rivals’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Goldman Sachs BDC||35.73%||11.54%||6.67%|
|Goldman Sachs BDC Competitors||-45.46%||7.47%||4.98%|
Goldman Sachs BDC pays an annual dividend of $1.80 per share and has a dividend yield of 8.0%. 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. As a group, “Investment Management & Fund Operators” companies pay a dividend yield of 2.6% and pay out 49.1% of their earnings in the form of a dividend.
Volatility & Risk
Goldman Sachs BDC has a beta of 0.87, suggesting that its stock price is 13% less volatile than the S&P 500. Comparatively, Goldman Sachs BDC’s rivals have a beta of 1.23, suggesting that their average stock price is 23% more volatile than the S&P 500.
Valuation and Earnings
This table compares Goldman Sachs BDC and its rivals revenue, earnings per share (EPS) and valuation.
|Gross Revenue||EBITDA||Price/Earnings Ratio|
|Goldman Sachs BDC||N/A||N/A||17.40|
|Goldman Sachs BDC Competitors||$2.89 billion||$931.92 million||7.47|
Goldman Sachs BDC’s rivals have higher revenue and earnings than Goldman Sachs BDC. Goldman Sachs BDC is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.
Institutional & Insider Ownership
36.7% of Goldman Sachs BDC shares are held by institutional investors. Comparatively, 62.0% of shares of all “Investment Management & Fund Operators” companies are held by institutional investors. 0.3% of Goldman Sachs BDC shares are held by insiders. Comparatively, 10.5% of shares of all “Investment Management & Fund Operators” companies are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
This is a summary of recent ratings and recommmendations for Goldman Sachs BDC and its rivals, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Goldman Sachs BDC||1||4||3||0||2.25|
|Goldman Sachs BDC Competitors||280||1641||1765||57||2.43|
Goldman Sachs BDC currently has a consensus price target of $22.18, suggesting a potential downside of 1.20%. As a group, “Investment Management & Fund Operators” companies have a potential upside of 7.61%. Given Goldman Sachs BDC’s rivals stronger consensus rating and higher possible upside, analysts plainly believe Goldman Sachs BDC has less favorable growth aspects than its rivals.
Goldman Sachs BDC rivals beat Goldman Sachs BDC on 9 of the 14 factors compared.
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.
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