Nicholas Financial (NASDAQ:NICK) and Palmer Square Capital BDC (NYSE:PSBD) Critical Analysis

Nicholas Financial (NASDAQ:NICK) and Palmer Square Capital BDC (NYSE:PSBD) are both small-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, profitability, valuation, analyst recommendations, institutional ownership, earnings and risk.

Valuation and Earnings

This table compares Nicholas Financial and Palmer Square Capital BDC’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nicholas Financial	$44.34 million	2.02	-$34.12 million	($5.01)	-1.41
Palmer Square Capital BDC	$112.22 million	4.78	$107.84 million	N/A	N/A

Palmer Square Capital BDC has higher revenue and earnings than Nicholas Financial.

Institutional & Insider Ownership

39.9% of Nicholas Financial shares are owned by institutional investors. Comparatively, 6.5% of Palmer Square Capital BDC shares are owned by institutional investors. 43.0% of Nicholas Financial shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Nicholas Financial	-134.48%	-50.06%	-42.27%
Palmer Square Capital BDC	96.09%	23.31%	9.23%

Analyst Recommendations

This is a breakdown of current recommendations for Nicholas Financial and Palmer Square Capital BDC, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nicholas Financial	0	0	0	0	N/A
Palmer Square Capital BDC	0	3	4	0	2.57

Palmer Square Capital BDC has a consensus price target of $16.93, suggesting a potential upside of 2.78%. Given Palmer Square Capital BDC’s higher probable upside, analysts plainly believe Palmer Square Capital BDC is more favorable than Nicholas Financial.

Summary

Palmer Square Capital BDC beats Nicholas Financial on 8 of the 10 factors compared between the two stocks.

About Nicholas Financial

Nicholas Financial, Inc. operates as a consumer finance company in the United States. The company engages in acquiring and servicing automobile finance installment contracts for the purchase of new and used automobiles and light trucks. It also originates direct consumer loans and sells consumer-finance related products. The company operates branch offices located in Alabama, Florida, Georgia, Idaho, Illinois, Indiana, Kentucky, Michigan, Missouri, Nevada, North Carolina, Nevada, Ohio, Pennsylvania, South Carolina, Tennessee, Texas, Utah, and Wisconsin. Nicholas Financial, Inc. was founded in 1985 and is headquartered in Clearwater, Florida.

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.