Comparing BlackRock TCP Capital (NASDAQ:TCPC) & Donegal Group (NASDAQ:DGICB)

BlackRock TCP Capital (NASDAQ:TCPC) and Donegal Group (NASDAQ:DGICB) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, earnings, dividends, valuation, profitability and institutional ownership.

Earnings and Valuation

This table compares BlackRock TCP Capital and Donegal Group’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
BlackRock TCP Capital $195.17 million 2.67 $30.58 million $1.61 5.60
Donegal Group $812.45 million 0.40 $47.15 million N/A N/A

Donegal Group has higher revenue and earnings than BlackRock TCP Capital.

Volatility & Risk

BlackRock TCP Capital has a beta of 1.57, meaning that its stock price is 57% more volatile than the S&P 500. Comparatively, Donegal Group has a beta of -0.04, meaning that its stock price is 104% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for BlackRock TCP Capital and Donegal Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
BlackRock TCP Capital 0 3 3 0 2.50
Donegal Group 0 0 0 0 N/A

BlackRock TCP Capital currently has a consensus price target of $11.63, suggesting a potential upside of 29.02%. Given BlackRock TCP Capital’s higher probable upside, equities research analysts clearly believe BlackRock TCP Capital is more favorable than Donegal Group.

Profitability

This table compares BlackRock TCP Capital and Donegal Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
BlackRock TCP Capital -33.37% 12.22% 5.39%
Donegal Group 3.56% 7.52% 1.73%

Insider & Institutional Ownership

31.3% of BlackRock TCP Capital shares are owned by institutional investors. Comparatively, 1.6% of Donegal Group shares are owned by institutional investors. 0.7% of BlackRock TCP Capital shares are owned by company insiders. Comparatively, 7.2% of Donegal Group shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Dividends

BlackRock TCP Capital pays an annual dividend of $1.44 per share and has a dividend yield of 16.0%. Donegal Group pays an annual dividend of $0.53 per share and has a dividend yield of 4.7%. BlackRock TCP Capital pays out 89.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Donegal Group has increased its dividend for 18 consecutive years.

Summary

BlackRock TCP Capital beats Donegal Group on 8 of the 15 factors compared between the two stocks.

About BlackRock TCP Capital

BlackRock TCP Capital Corp. is a business development company specializing in direct equity and debt investments in middle-market, senior secured loans, junior loans, originated loans, mezzanine, senior debt instruments, bonds, and secondary-market investments. It seeks to invest in the United States. The fund typically invests between $10 million and $35 million in companies with enterprise values between $100 million and $1500 million. It prefers to make equity investments in companies for an ownership stake.

About Donegal Group

Donegal Group Inc., an insurance holding company, provides personal and commercial lines of property and casualty insurance to businesses and individuals in the Mid-Atlantic, Midwestern, New England, and southern states. It operates through four segments: Investment Function, Personal Lines of Insurance, Commercial Lines of Insurance, and Investment in DFSC. The company offers private passenger automobile policies that provide protection against liability for bodily injury and property damage arising from automobile accidents, as well as protection against loss from damage to automobiles. It also offers homeowners policies, which provide coverage for damage to residences and their contents from a range of perils, including fire, lightning, windstorm, and theft; and liability of the insured arising from injury to other persons or their property. In addition, the company offers commercial automobile policies that provide protection against liability for bodily injury and property damage arising from automobile accidents and protection against loss from damage to automobiles owned by the insured; commercial multi-peril policies that provide protection to businesses against various perils, primarily combining liability and physical damage coverages; and workers' compensation policies, which provide benefits to employees for injuries sustained during employment. The company markets its insurance products through a network of approximately 2,400 independent insurance agencies. Donegal Group Inc. was founded in 1986 and is headquartered in Marietta, Pennsylvania. Donegal Group Inc. is a subsidiary of Donegal Mutual Insurance Company.

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