WhiteHorse Finance (NASDAQ:WHF) vs. Palmer Square Capital BDC (NYSE:PSBD) Head to Head Comparison

Palmer Square Capital BDC (NYSE:PSBD) and WhiteHorse Finance (NASDAQ:WHF) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, analyst recommendations, risk, earnings, valuation, institutional ownership and dividends.

Institutional & Insider Ownership

6.5% of Palmer Square Capital BDC shares are held by institutional investors. Comparatively, 13.2% of WhiteHorse Finance shares are held by institutional investors. 1.1% of Palmer Square Capital BDC shares are held by company insiders. Comparatively, 2.5% of WhiteHorse Finance shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility & Risk

Palmer Square Capital BDC has a beta of 0.67, indicating that its stock price is 33% less volatile than the S&P 500. Comparatively, WhiteHorse Finance has a beta of 0.56, indicating that its stock price is 44% less volatile than the S&P 500.

Dividends

Palmer Square Capital BDC pays an annual dividend of $1.44 per share and has a dividend yield of 12.0%. WhiteHorse Finance pays an annual dividend of $1.00 per share and has a dividend yield of 14.4%. Palmer Square Capital BDC pays out 334.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. WhiteHorse Finance pays out 232.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. WhiteHorse Finance has raised its dividend for 3 consecutive years. WhiteHorse Finance is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Palmer Square Capital BDC and WhiteHorse Finance’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Palmer Square Capital BDC	10.85%	10.77%	4.10%
WhiteHorse Finance	12.91%	9.93%	4.14%

Analyst Recommendations

This is a summary of current recommendations and price targets for Palmer Square Capital BDC and WhiteHorse Finance, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Palmer Square Capital BDC	0	4	0	0	2.00
WhiteHorse Finance	2	3	0	0	1.60

Palmer Square Capital BDC currently has a consensus price target of $13.00, indicating a potential upside of 8.06%. WhiteHorse Finance has a consensus price target of $7.75, indicating a potential upside of 11.51%. Given WhiteHorse Finance’s higher possible upside, analysts clearly believe WhiteHorse Finance is more favorable than Palmer Square Capital BDC.

Earnings and Valuation

This table compares Palmer Square Capital BDC and WhiteHorse Finance”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Palmer Square Capital BDC	$143.51 million	2.64	$47.67 million	$0.43	27.98
WhiteHorse Finance	$92.82 million	1.74	$10.85 million	$0.43	16.16

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

Summary

WhiteHorse Finance beats Palmer Square Capital BDC on 8 of the 15 factors compared between the two stocks.

About Palmer Square Capital BDC

Palmer Square Capital BDC Inc. is an externally managed, non-diversified closed-end management investment company which primarily lends to and invests in corporate debt securities, including small to large private U.S. companies and has elected to be regulated as a business development company. Palmer Square Capital BDC Inc. is based in MISSION WOODS, Kan.

About WhiteHorse Finance

WhiteHorse Finance, Inc. is business development company, non-diversified, closed end management company specializing in originating senior secured loans, lower middle market, growth capital industries. It invests in broadline retail, office services and supplies, building products, health care services, health care supplies, research and consulting services, application software, home furnishings, specialized consumer services, data processing and outsourced services, leisure facilities, cable, and satellite. It prefers to invest in United States. It typically invests between $5 million to $25 million in companies having enterprise value of between $50 million and $350 million.