Head-To-Head Analysis: Crescent Capital BDC (NASDAQ:CCAP) vs. Gladstone Capital (NASDAQ:GLAD)

Crescent Capital BDC (NASDAQ:CCAP) and Gladstone Capital (NASDAQ:GLAD) are both small-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their risk, institutional ownership, analyst recommendations, earnings, profitability, dividends and valuation.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Crescent Capital BDC and Gladstone Capital, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Crescent Capital BDC	1	3	2	0	2.17
Gladstone Capital	0	4	2	0	2.33

Crescent Capital BDC currently has a consensus price target of $14.30, suggesting a potential upside of 25.77%. Gladstone Capital has a consensus price target of $21.67, suggesting a potential upside of 14.34%. Given Crescent Capital BDC’s higher probable upside, equities analysts clearly believe Crescent Capital BDC is more favorable than Gladstone Capital.

Volatility and Risk

Crescent Capital BDC has a beta of 0.59, meaning that its share price is 41% less volatile than the S&P 500. Comparatively, Gladstone Capital has a beta of 0.92, meaning that its share price is 8% less volatile than the S&P 500.

Earnings and Valuation

This table compares Crescent Capital BDC and Gladstone Capital”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Crescent Capital BDC	$26.38 million	15.88	$34.51 million	$0.41	27.73
Gladstone Capital	$89.12 million	4.80	$58.11 million	$1.83	10.36

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

Insider and Institutional Ownership

49.5% of Crescent Capital BDC shares are owned by institutional investors. Comparatively, 10.7% of Gladstone Capital shares are owned by institutional investors. 1.2% of Crescent Capital BDC shares are owned by company insiders. Comparatively, 3.8% of Gladstone Capital shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Dividends

Crescent Capital BDC pays an annual dividend of $1.68 per share and has a dividend yield of 14.8%. Gladstone Capital pays an annual dividend of $1.80 per share and has a dividend yield of 9.5%. Crescent Capital BDC pays out 409.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Gladstone Capital pays out 98.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Crescent Capital BDC has raised its dividend for 1 consecutive years and Gladstone Capital has raised its dividend for 4 consecutive years.

Profitability

This table compares Crescent Capital BDC and Gladstone Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Crescent Capital BDC	9.26%	9.34%	4.04%
Gladstone Capital	45.15%	9.79%	5.31%

Summary

Gladstone Capital beats Crescent Capital BDC on 11 of the 16 factors compared between the two stocks.

About Crescent Capital BDC

Crescent Capital BDC, Inc. is as a business development company private equity / buyouts and loan fund. It specializes in directly investing. It specializes in middle market. The fund seeks to invest in United States.

About Gladstone Capital

Gladstone Capital Corporation is a business development company specializing in lower middle market, growth capital, add on acquisitions, change of control, buy & build strategies, debt refinancing, debt investments in senior term loans, revolving loans, secured first and second lien term loans, senior subordinated loans, unitranche loans, junior subordinated loans, and mezzanine loans and equity investments in the form of common stock, preferred stock, limited liability company interests, or warrants. It operates as a business development company. The fund also makes private equity investments in acquisitions, buyouts and recapitalizations, and refinancing existing debts. It targets small and medium-sized companies in United States. It is industry agnostic and seeks to invest in companies engaged in the business services, light and specialty manufacturing, niche industrial products and services, specialty consumer products and services, energy services, transportation and logistics, healthcare and education services, specialty chemicals, media and communications and aerospace and defense. The fund seeks to invest between $7 million and $30 million in companies that have between $20 million and $150 million in sales and EBITDA between $3 million and $25 million. It prefers to acquire minority stakes. It seeks to exit its investments through strategic acquisitions by other industry participants or financial buyers, initial public offerings of common stock, or other capital market transactions.