Head to Head Review: Bain Capital Specialty Finance (NYSE:BCSF) & The Goldman Sachs Group (NYSE:GS)

The Goldman Sachs Group (NYSE:GS) and Bain Capital Specialty Finance (NYSE:BCSF) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, valuation, institutional ownership, analyst recommendations, earnings, risk and dividends.

Valuation & Earnings

This table compares The Goldman Sachs Group and Bain Capital Specialty Finance”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
The Goldman Sachs Group	$66.20 billion	4.12	$17.18 billion	$64.79	14.46
Bain Capital Specialty Finance	$273.24 million	2.63	$98.76 million	$0.99	11.18

The Goldman Sachs Group has higher revenue and earnings than Bain Capital Specialty Finance. Bain Capital Specialty Finance is trading at a lower price-to-earnings ratio than The Goldman Sachs Group, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares The Goldman Sachs Group and Bain Capital Specialty Finance’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
The Goldman Sachs Group	15.53%	19.16%	1.07%
Bain Capital Specialty Finance	24.22%	10.40%	4.33%

Volatility and Risk

The Goldman Sachs Group has a beta of 1.29, indicating that its stock price is 29% more volatile than the S&P 500. Comparatively, Bain Capital Specialty Finance has a beta of 0.58, indicating that its stock price is 42% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for The Goldman Sachs Group and Bain Capital Specialty Finance, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
The Goldman Sachs Group	1	13	9	1	2.42
Bain Capital Specialty Finance	1	3	0	0	1.75

The Goldman Sachs Group currently has a consensus price target of $1,055.71, indicating a potential upside of 12.67%. Bain Capital Specialty Finance has a consensus price target of $12.60, indicating a potential upside of 13.87%. Given Bain Capital Specialty Finance’s higher probable upside, analysts clearly believe Bain Capital Specialty Finance is more favorable than The Goldman Sachs Group.

Dividends

The Goldman Sachs Group pays an annual dividend of $20.00 per share and has a dividend yield of 2.1%. Bain Capital Specialty Finance pays an annual dividend of $1.68 per share and has a dividend yield of 15.2%. The Goldman Sachs Group pays out 30.9% of its earnings in the form of a dividend. Bain Capital Specialty Finance pays out 169.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. The Goldman Sachs Group has raised its dividend for 13 consecutive years and Bain Capital Specialty Finance has raised its dividend for 4 consecutive years.

Institutional and Insider Ownership

71.2% of The Goldman Sachs Group shares are held by institutional investors. 0.5% of The Goldman Sachs Group shares are held by insiders. Comparatively, 0.6% of Bain Capital Specialty Finance shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

The Goldman Sachs Group beats Bain Capital Specialty Finance on 13 of the 18 factors compared between the two stocks.

About The Goldman Sachs Group

The Goldman Sachs Group, Inc., a financial institution, provides a range of financial services for corporations, financial institutions, governments, and individuals worldwide. It operates through Global Banking & Markets, Asset & Wealth Management, and Platform Solutions segments. The Global Banking & Markets segment provides financial advisory services, including strategic advisory assignments related to mergers and acquisitions, divestitures, corporate defense activities, restructurings, and spin-offs; and relationship lending, and acquisition financing, as well as secured lending, through structured credit and asset-backed lending and involved in financing under securities to resale agreements. This segment also offers client execution activities for cash and derivative instruments; credit and interest rate products; and provision of mortgages, currencies, commodities, and equities related products, as well as underwriting services. The Asset & Wealth Management segment manages assets across various classes, including equity, fixed income, hedge funds, credit funds, private equity, real estate, currencies, and commodities; and provides customized investment advisory solutions, wealth advisory services, personalized financial planning, and private banking services, as well as invests in corporate equity, credit, real estate, and infrastructure assets. The Platform Solutions segment offers credit cards and point-of-sale financing for purchase of goods or services. This segment also provides cash management services, such as deposit-taking and payment solutions for corporate and institutional clients. The Goldman Sachs Group, Inc. was founded in 1869 and is headquartered in New York, New York.

About Bain Capital Specialty Finance

Bain Capital Specialty Finance, Inc. is business development company specializing in direct loans to middle-market companies. The fund seeks to invest in senior investments with a first or second lien on collateral, senior first lien, stretch senior, senior second lien, unitranche, mezzanine debt, junior securities, other junior investments, and secondary purchases of assets or portfolios that primarily consist of middle-market corporate debt. It typically invests in companies with EBITDA between $10 million and $150 million.