Critical Review: Trinity Capital (NASDAQ:TRIN) vs. Crescent Capital BDC (NASDAQ:CCAP)

Crescent Capital BDC (NASDAQ:CCAP) and Trinity Capital (NASDAQ:TRIN) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, valuation, profitability, institutional ownership, risk, analyst recommendations and earnings.

Insider & Institutional Ownership

49.5% of Crescent Capital BDC shares are held by institutional investors. Comparatively, 24.6% of Trinity Capital shares are held by institutional investors. 1.1% of Crescent Capital BDC shares are held by insiders. Comparatively, 5.3% of Trinity Capital shares are held by 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

Crescent Capital BDC pays an annual dividend of $1.68 per share and has a dividend yield of 11.5%. Trinity Capital pays an annual dividend of $2.04 per share and has a dividend yield of 13.8%. Crescent Capital BDC pays out 171.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Trinity Capital pays out 93.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Crescent Capital BDC has increased its dividend for 1 consecutive years and Trinity Capital has increased its dividend for 1 consecutive years. Trinity Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Crescent Capital BDC and Trinity Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Crescent Capital BDC	20.84%	9.76%	4.30%
Trinity Capital	50.49%	15.51%	7.00%

Valuation & Earnings

This table compares Crescent Capital BDC and Trinity Capital”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Crescent Capital BDC	$48.46 million	11.11	$73.65 million	$0.98	14.86
Trinity Capital	$237.69 million	4.70	$115.60 million	$2.19	6.74

Trinity Capital has higher revenue and earnings than Crescent Capital BDC. Trinity Capital is trading at a lower price-to-earnings ratio than Crescent Capital BDC, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Crescent Capital BDC has a beta of 0.55, meaning that its stock price is 45% less volatile than the S&P 500. Comparatively, Trinity Capital has a beta of 0.53, meaning that its stock price is 47% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings for Crescent Capital BDC and Trinity Capital, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Crescent Capital BDC	1	1	3	1	2.67
Trinity Capital	1	1	2	0	2.25

Crescent Capital BDC presently has a consensus target price of $16.38, indicating a potential upside of 12.47%. Trinity Capital has a consensus target price of $15.63, indicating a potential upside of 5.79%. Given Crescent Capital BDC’s stronger consensus rating and higher probable upside, equities analysts clearly believe Crescent Capital BDC is more favorable than Trinity Capital.

Summary

Trinity Capital beats Crescent Capital BDC on 9 of the 17 factors compared between the two stocks.

About Crescent Capital BDC

Crescent Capital BDC, Inc. is as a business development company private equity / buyouts and loan fund. It specializes in directly investing. It specializes in middle market. The fund seeks to invest in United States.

About Trinity Capital

Trinity Capital Inc. is a business development company. It is a venture capital firm specializing in venture debt to growth stage companies looking for loans and/or equipment financing. Trinity Capital Inc. was founded in 2019 is based in Phoenix, Arizona with additional offices in the United States.