Critical Contrast: Gladstone Capital Corporation (GLAD) & Its Peers

Gladstone Capital Corporation (NASDAQ: GLAD) is one of 573 publicly-traded companies in the “Closed End Funds” industry, but how does it weigh in compared to its competitors? We will compare Gladstone Capital Corporation to related businesses based on the strength of its valuation, dividends, earnings, institutional ownership, risk, profitability and analyst recommendations.

Institutional and Insider Ownership

14.4% of Gladstone Capital Corporation shares are held by institutional investors. Comparatively, 23.2% of shares of all “Closed End Funds” companies are held by institutional investors. 6.5% of Gladstone Capital Corporation shares are held by company insiders. Comparatively, 3.5% of shares of all “Closed End Funds” companies are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and target prices for Gladstone Capital Corporation and its competitors, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Gladstone Capital Corporation 1 3 1 0 2.00
Gladstone Capital Corporation Competitors 192 1181 1412 13 2.45

Gladstone Capital Corporation currently has a consensus target price of $9.16, indicating a potential downside of 4.06%. As a group, “Closed End Funds” companies have a potential upside of 39.56%. Given Gladstone Capital Corporation’s competitors stronger consensus rating and higher possible upside, analysts plainly believe Gladstone Capital Corporation has less favorable growth aspects than its competitors.

Volatility & Risk

Gladstone Capital Corporation has a beta of 1.2, suggesting that its stock price is 20% more volatile than the S&P 500. Comparatively, Gladstone Capital Corporation’s competitors have a beta of 0.55, suggesting that their average stock price is 45% less volatile than the S&P 500.

Dividends

Gladstone Capital Corporation pays an annual dividend of $0.84 per share and has a dividend yield of 8.8%. Gladstone Capital Corporation pays out 62.2% of its earnings in the form of a dividend. As a group, “Closed End Funds” companies pay a dividend yield of 8.7% and pay out 87.0% of their earnings in the form of a dividend. Gladstone Capital Corporation is clearly a better dividend stock than its competitors, given its higher yield and lower payout ratio.

Earnings & Valuation

This table compares Gladstone Capital Corporation and its competitors revenue, earnings per share and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Gladstone Capital Corporation N/A N/A 7.07
Gladstone Capital Corporation Competitors $57.58 million $38.86 million -0.16

Gladstone Capital Corporation’s competitors have higher revenue and earnings than Gladstone Capital Corporation. Gladstone Capital Corporation is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Profitability

This table compares Gladstone Capital Corporation and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Gladstone Capital Corporation 85.01% 9.88% 6.26%
Gladstone Capital Corporation Competitors -40.21% 6.77% 5.35%

Summary

Gladstone Capital Corporation beats its competitors on 7 of the 13 factors compared.

About Gladstone Capital Corporation

Gladstone Capital Corporation is a closed-end, non-diversified management investment company, operating as a business development company (BDC). The objectives of the Company are to achieve and grow current income by investing in debt securities of established businesses that it believes will provide stable earnings and cash flow to pay expenses, make principal and interest payments on its outstanding indebtedness and make distributions to stockholders that grow over time, and to provide its stockholders with long-term capital appreciation in the value of its assets by investing in equity securities of established businesses that it believes can grow over time to permit it to sell its equity investments for capital gains. The Company is focused on investing in lower middle-market companies in the United States. It has investments in south, Midwest, west and northeast of the United States. Its portfolio allocation includes debt investments and equity investments.

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