Head to Head Review: Blackstone (NYSE:BX) vs. Main Street Capital (NYSE:MAIN)

Main Street Capital (NYSE:MAIN) and Blackstone (NYSE:BX) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, risk, analyst recommendations, dividends, institutional ownership, valuation and profitability.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Main Street Capital and Blackstone, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Main Street Capital	0	5	5	0	2.50
Blackstone	0	12	13	0	2.52

Main Street Capital presently has a consensus price target of $61.17, indicating a potential upside of 8.48%. Blackstone has a consensus price target of $144.57, indicating a potential upside of 20.38%. Given Blackstone’s stronger consensus rating and higher possible upside, analysts clearly believe Blackstone is more favorable than Main Street Capital.

Earnings and Valuation

This table compares Main Street Capital and Blackstone”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Main Street Capital	$566.39 million	9.34	$493.40 million	$4.83	11.67
Blackstone	$14.45 billion	6.24	$3.02 billion	$4.50	26.69

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

Institutional and Insider Ownership

20.3% of Main Street Capital shares are owned by institutional investors. Comparatively, 70.0% of Blackstone shares are owned by institutional investors. 3.8% of Main Street Capital shares are owned by company insiders. Comparatively, 1.0% of Blackstone shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Dividends

Main Street Capital pays an annual dividend of $3.18 per share and has a dividend yield of 5.6%. Blackstone pays an annual dividend of $4.48 per share and has a dividend yield of 3.7%. Main Street Capital pays out 65.8% of its earnings in the form of a dividend. Blackstone pays out 99.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Main Street Capital has increased its dividend for 4 consecutive years. Main Street Capital is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Main Street Capital and Blackstone’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Main Street Capital	76.98%	11.45%	6.07%
Blackstone	22.11%	23.16%	9.61%

Risk & Volatility

Main Street Capital has a beta of 0.73, meaning that its stock price is 27% less volatile than the S&P 500. Comparatively, Blackstone has a beta of 1.52, meaning that its stock price is 52% more volatile than the S&P 500.

Summary

Blackstone beats Main Street Capital on 10 of the 17 factors compared between the two stocks.

About Main Street Capital

Main Street Capital Corporation is a business development company that provides customized debt and equity financing to privately held businesses. It focuses on lower middle market companies and also invests in debt securities issued by middle market businesses. The company’s financing can support business growth, acquisitions, recapitalizations, and management buyouts. Main Street generally works directly with portfolio companies and their owners, offering capital structures tailored to each business’s needs.

About Blackstone

Blackstone Inc. is a global alternative asset manager that invests on behalf of institutional and individual investors. Its businesses span private equity, real estate, credit and insurance, infrastructure, and multi-asset investing, with strategies that include private funds and investment products for a range of clients. Founded in 1985 by Stephen A. Schwarzman and Peter G. Peterson, the firm initially focused on mergers and acquisitions advisory work before expanding into investment management.