Critical Analysis: Nuveen Churchill Direct Lending (NYSE:NCDL) vs. Blackrock Tcp Capital (NASDAQ:TCPC)

Blackrock Tcp Capital (NASDAQ:TCPC) and Nuveen Churchill Direct Lending (NYSE:NCDL) are both small-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, risk, profitability, institutional ownership, dividends, earnings and analyst recommendations.

Profitability

This table compares Blackrock Tcp Capital and Nuveen Churchill Direct Lending’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Blackrock Tcp Capital	-4.20%	15.27%	6.15%
Nuveen Churchill Direct Lending	36.83%	11.13%	4.83%

Earnings and Valuation

This table compares Blackrock Tcp Capital and Nuveen Churchill Direct Lending”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Blackrock Tcp Capital	$259.44 million	1.62	-$63.14 million	($0.13)	-38.00
Nuveen Churchill Direct Lending	$224.04 million	2.93	$116.32 million	$1.53	8.70

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

Dividends

Blackrock Tcp Capital pays an annual dividend of $1.00 per share and has a dividend yield of 20.2%. Nuveen Churchill Direct Lending pays an annual dividend of $1.80 per share and has a dividend yield of 13.5%. Blackrock Tcp Capital pays out -769.2% of its earnings in the form of a dividend. Nuveen Churchill Direct Lending pays out 117.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Blackrock Tcp Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk and Volatility

Blackrock Tcp Capital has a beta of 0.89, meaning that its share price is 11% less volatile than the S&P 500. Comparatively, Nuveen Churchill Direct Lending has a beta of 0.4, meaning that its share price is 60% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings for Blackrock Tcp Capital and Nuveen Churchill Direct Lending, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Blackrock Tcp Capital	2	1	0	1	2.00
Nuveen Churchill Direct Lending	0	4	1	0	2.20

Blackrock Tcp Capital currently has a consensus target price of $6.50, indicating a potential upside of 31.58%. Nuveen Churchill Direct Lending has a consensus target price of $15.75, indicating a potential upside of 18.33%. Given Blackrock Tcp Capital’s higher probable upside, equities research analysts clearly believe Blackrock Tcp Capital is more favorable than Nuveen Churchill Direct Lending.

Summary

Blackrock Tcp Capital beats Nuveen Churchill Direct Lending 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, small businesses, debt securities, senior secured loans, junior loans, originated loans, mezzanine, senior debt instruments, bonds, and secondary-market investments. It typically invests in communication services, public relations services, television, wireless telecommunication services, apparel, textile mills, restaurants, retailing, energy, oil and gas extraction, Patent owners and Lessors, Federal and Federally- Sponsored Credit agencies, insurance, hospital and healthcare centers, Biotechnology, engineering services, heavy electrical equipment, tax accounting, scientific and related consulting services, charter freight air transportation, Information technology consulting, application hosting services, software diagram and design, computer aided design, communication equipment, electronics manufacturing equipment, computer components, chemicals. 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 including complex situations. It prefers to make equity investments in companies for an ownership stake.

About Nuveen Churchill Direct Lending

Nuveen Churchill Direct Lending Corp. is a specialty finance company focused primarily on investing in senior secured loans to private equity-owned U.S. middle market companies. It has elected to be regulated as a business development company. Nuveen Churchill Direct Lending Corp. is based in NEW YORK.