Contrasting Blackrock Capital Investment (BKCC) & MCG Capital (MCGC)

Blackrock Capital Investment (NASDAQ: BKCC) and MCG Capital (NASDAQ:MCGC) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, institutional ownership, profitability, risk, valuation and earnings.

Valuation & Earnings

This table compares Blackrock Capital Investment and MCG Capital’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Blackrock Capital Investment $117.44 million 3.54 -$84.29 million $0.28 20.29
MCG Capital N/A N/A N/A $0.11 N/A

MCG Capital has lower revenue, but higher earnings than Blackrock Capital Investment. MCG Capital is trading at a lower price-to-earnings ratio than Blackrock Capital Investment, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Blackrock Capital Investment and MCG Capital, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Blackrock Capital Investment 0 1 1 0 2.50
MCG Capital 0 0 0 0 N/A

Blackrock Capital Investment presently has a consensus price target of $7.25, indicating a potential upside of 27.64%.

Institutional & Insider Ownership

30.9% of Blackrock Capital Investment shares are held by institutional investors. 1.3% of Blackrock Capital Investment shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Blackrock Capital Investment and MCG Capital’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Blackrock Capital Investment 19.87% 9.67% 6.19%
MCG Capital -9.19% -0.34% -0.33%

Dividends

Blackrock Capital Investment pays an annual dividend of $0.72 per share and has a dividend yield of 12.7%. MCG Capital does not pay a dividend. Blackrock Capital Investment pays out 257.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

Blackrock Capital Investment beats MCG Capital on 9 of the 10 factors compared between the two stocks.

Blackrock Capital Investment 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.

MCG Capital Company Profile

PFLT Funding II, LLC, formerly MCG Capital Corporation, is a United States-based company. The Company provides products and services.

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