BlackRock Capital Investment Corporation (NASDAQ: BKCC) and Apollo Investment Corporation (NASDAQ:AINV) are both small-cap finance companies, but which is the better stock? We will compare the two companies based on the strength of their risk, institutional ownership, analyst recommendations, earnings, dividends, valuation and profitability.

Volatility and Risk

BlackRock Capital Investment Corporation has a beta of 0.86, indicating that its stock price is 14% less volatile than the S&P 500. Comparatively, Apollo Investment Corporation has a beta of 0.92, indicating that its stock price is 8% less volatile than the S&P 500.

Institutional and Insider Ownership

29.0% of BlackRock Capital Investment Corporation shares are owned by institutional investors. Comparatively, 45.7% of Apollo Investment Corporation shares are owned by institutional investors. 1.3% of BlackRock Capital Investment Corporation shares are owned by company insiders. Comparatively, 0.3% of Apollo Investment Corporation shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Dividends

BlackRock Capital Investment Corporation pays an annual dividend of $0.72 per share and has a dividend yield of 9.8%. Apollo Investment Corporation pays an annual dividend of $0.60 per share and has a dividend yield of 9.8%. BlackRock Capital Investment Corporation pays out -1,028.6% of its earnings in the form of a dividend. Apollo Investment Corporation pays out 150.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for BlackRock Capital Investment Corporation and Apollo Investment Corporation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
BlackRock Capital Investment Corporation 0 1 0 0 2.00
Apollo Investment Corporation 1 4 1 0 2.00

BlackRock Capital Investment Corporation currently has a consensus price target of $8.00, suggesting a potential upside of 8.84%. Apollo Investment Corporation has a consensus price target of $6.33, suggesting a potential upside of 3.66%. Given BlackRock Capital Investment Corporation’s higher probable upside, equities research analysts clearly believe BlackRock Capital Investment Corporation is more favorable than Apollo Investment Corporation.

Profitability

This table compares BlackRock Capital Investment Corporation and Apollo Investment Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
BlackRock Capital Investment Corporation -5.04% 7.20% 4.51%
Apollo Investment Corporation 33.04% 9.75% 5.75%

Valuation and Earnings

This table compares BlackRock Capital Investment Corporation and Apollo Investment Corporation’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
BlackRock Capital Investment Corporation N/A N/A N/A ($0.07) -105.00
Apollo Investment Corporation N/A N/A N/A $0.40 15.28

BlackRock Capital Investment Corporation is trading at a lower price-to-earnings ratio than Apollo Investment Corporation, indicating that it is currently the more affordable of the two stocks.

Summary

Apollo Investment Corporation beats BlackRock Capital Investment Corporation on 8 of the 12 factors compared between the two stocks.

BlackRock Capital Investment Corporation Company Profile

BlackRock Capital Investment Corporation is an externally-managed, non-diversified, closed-end management investment company. The Company’s investment objective is to generate both current income and capital appreciation through its debt and equity investments. The Company provides middle-market companies with a range of financing solutions, including senior and junior secured, unsecured and subordinated debt securities and loans, and equity securities. Its targeted investment typically ranges between $10 million and $50 million. The Company generally seeks to invest in companies that operate in a range of industries. The Company’s investments are in senior and junior secured, unsecured and subordinated loans to the United States private and certain public middle-market companies. The Company’s investment advisor is BlackRock Advisors, LLC.

Apollo Investment Corporation Company Profile

Apollo Investment Corporation is a closed-end, externally managed, non-diversified management investment company. The Company’s investment objective is to generate current income and capital appreciation. It invests primarily in various forms of debt investments, including secured and unsecured debt, loan investments and/or equity in private middle-market companies. It may also invest in the securities of public companies and in structured products and other investments, such as collateralized loan obligations (CLOs) and credit-linked notes (CLNs). Its portfolio also includes equity interests, such as common stock, preferred stock, warrants or options. It invests in investments in the United States secured and unsecured loans, other debt securities and equity, and may also invests a portion of the portfolio in other investment opportunities, including foreign securities and structured products. Apollo Investment Management, L.P. is the investment advisor of the Company.

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