Critical Contrast: Blackstone Secured Lending Fund (NYSE:BXSL) & Blackrock Tcp Capital (NASDAQ:TCPC)

Blackrock Tcp Capital (NASDAQ:TCPC) and Blackstone Secured Lending Fund (NYSE:BXSL) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, earnings, institutional ownership, analyst recommendations, risk, valuation and profitability.

Profitability

This table compares Blackrock Tcp Capital and Blackstone Secured Lending Fund’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%
Blackstone Secured Lending Fund	42.38%	11.85%	5.32%

Dividends

Blackrock Tcp Capital pays an annual dividend of $1.00 per share and has a dividend yield of 22.2%. Blackstone Secured Lending Fund pays an annual dividend of $3.08 per share and has a dividend yield of 13.1%. Blackrock Tcp Capital pays out -769.2% of its earnings in the form of a dividend. Blackstone Secured Lending Fund pays out 115.8% 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.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Blackrock Tcp Capital and Blackstone Secured Lending Fund, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Blackrock Tcp Capital	2	2	0	0	1.50
Blackstone Secured Lending Fund	1	2	6	0	2.56

Blackrock Tcp Capital currently has a consensus price target of $6.50, indicating a potential upside of 44.44%. Blackstone Secured Lending Fund has a consensus price target of $29.13, indicating a potential upside of 23.75%. Given Blackrock Tcp Capital’s higher possible upside, equities research analysts clearly believe Blackrock Tcp Capital is more favorable than Blackstone Secured Lending Fund.

Valuation & Earnings

This table compares Blackrock Tcp Capital and Blackstone Secured Lending Fund”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Blackrock Tcp Capital	$259.44 million	1.47	-$63.14 million	($0.13)	-34.62
Blackstone Secured Lending Fund	$1.33 billion	4.10	$694.10 million	$2.66	8.85

Blackstone Secured Lending Fund has higher revenue and earnings than Blackrock Tcp Capital. Blackrock Tcp Capital is trading at a lower price-to-earnings ratio than Blackstone Secured Lending Fund, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

36.5% of Blackstone Secured Lending Fund shares are held by institutional investors. 0.2% of Blackrock Tcp Capital shares are held by company insiders. Comparatively, 0.1% of Blackstone Secured Lending Fund 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.

Risk & Volatility

Blackrock Tcp Capital has a beta of 0.89, indicating that its share price is 11% less volatile than the S&P 500. Comparatively, Blackstone Secured Lending Fund has a beta of 0.41, indicating that its share price is 59% less volatile than the S&P 500.

Summary

Blackstone Secured Lending Fund beats Blackrock Tcp Capital on 9 of the 16 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 Blackstone Secured Lending Fund

Blackstone Secured Lending Fund is business development company and a Delaware statutory trust formed on March 26, 2018, and structured as an externally managed, non-diversified closed-end investment Fund. On October 26, 2018, the fund elected to be regulated as a business development company (BDC) under the Investment Company Act of 1940, as amended (the 1940 Act). In addition, the Fund elected to be treated for U.S. federal income tax purposes, as a regulated investment company (RIC), as defined under Subchapter M of the Internal Revenue Code of 1986, as amended (the Code). The fund also intends to continue to comply with the requirements prescribed by the Code in order to maintain tax treatment as a RIC. The fund's investment objectives are to generate current income and, to a lesser extent, long-term capital appreciation. The Fund seeks to achieve its investment objective primarily through originated loans, equity and other securities, including syndicated loans, of private U.S. companies, specifically small and middle market companies, typically in the form of first lien senior secured and unitranche loans (including first out/last out loans), and to a lesser extent, second lien, third lien, unsecured and subordinated loans and other debt and equity securities.