Golub Capital BDC (NASDAQ: GBDC) and Tortoise Energy Infrastructure (NYSE:TYG) are both small-cap financials companies, but which is the better investment? We will contrast the two businesses based on the strength of their institutional ownership, risk, valuation, analyst recommendations, dividends, earnings and profitability.
This table compares Golub Capital BDC and Tortoise Energy Infrastructure’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Golub Capital BDC||58.06%||7.90%||4.06%|
|Tortoise Energy Infrastructure||N/A||N/A||N/A|
This is a summary of current ratings and recommmendations for Golub Capital BDC and Tortoise Energy Infrastructure, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Golub Capital BDC||0||3||0||0||2.00|
|Tortoise Energy Infrastructure||0||0||1||0||3.00|
Golub Capital BDC currently has a consensus price target of $19.50, indicating a potential upside of 7.91%. Tortoise Energy Infrastructure has a consensus price target of $34.00, indicating a potential upside of 7.70%. Given Golub Capital BDC’s higher possible upside, research analysts plainly believe Golub Capital BDC is more favorable than Tortoise Energy Infrastructure.
Golub Capital BDC pays an annual dividend of $1.28 per share and has a dividend yield of 7.1%. Tortoise Energy Infrastructure pays an annual dividend of $2.62 per share and has a dividend yield of 8.3%. Golub Capital BDC pays out 88.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Tortoise Energy Infrastructure pays out -429.5% of its earnings in the form of a dividend. Tortoise Energy Infrastructure is clearly the better dividend stock, given its higher yield and lower payout ratio.
Risk and Volatility
Golub Capital BDC has a beta of 0.67, indicating that its share price is 33% less volatile than the S&P 500. Comparatively, Tortoise Energy Infrastructure has a beta of 1.27, indicating that its share price is 27% more volatile than the S&P 500.
Earnings & Valuation
This table compares Golub Capital BDC and Tortoise Energy Infrastructure’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Golub Capital BDC||$137.76 million||7.82||$82.28 million||$1.45||12.46|
|Tortoise Energy Infrastructure||N/A||N/A||N/A||($0.61)||-51.75|
Golub Capital BDC has higher revenue and earnings than Tortoise Energy Infrastructure. Tortoise Energy Infrastructure 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.
Insider & Institutional Ownership
40.6% of Golub Capital BDC shares are owned by institutional investors. Comparatively, 30.0% of Tortoise Energy Infrastructure shares are owned by institutional investors. 10.7% of Golub Capital BDC shares are owned by insiders. Comparatively, 0.3% of Tortoise Energy Infrastructure shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Golub Capital BDC beats Tortoise Energy Infrastructure on 9 of the 14 factors compared between the two stocks.
About Golub Capital BDC
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).
About Tortoise Energy Infrastructure
Tortoise Energy Infrastructure Corporation (the Fund) is a non-diversified, closed-end management investment company. The Fund seeks a high level of total return with a focus on current distributions paid to stockholders. The Fund invests primarily in equity securities of master limited partnerships (MLPs) and their affiliates that transport, gather, process or store natural gas, natural gas liquids (NGLs), crude oil and refined petroleum products. Under normal circumstances, the Fund invests at least 90% of its total assets (including assets obtained through leverage) in securities of energy infrastructure companies and at least 70% of its total assets in equity securities of MLPs. The Fund may invest up to 30% of its total assets in restricted securities, primarily through direct placements. The Fund may invest up to 25% of its total assets in debt securities, including those rated below investment grade. Tortoise Capital Advisors, L.L.C. is the investment advisor of the Fund.
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