Hennessy Advisors (NASDAQ:HNNA) & Palmer Square Capital BDC (NYSE:PSBD) Head-To-Head Survey

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Hennessy Advisors	24.77%	8.31%	5.48%
Palmer Square Capital BDC	-26.73%	11.22%	4.15%

Analyst Ratings

This is a summary of current ratings and recommmendations for Hennessy Advisors and Palmer Square Capital BDC, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hennessy Advisors	0	1	0	0	2.00
Palmer Square Capital BDC	0	5	0	0	2.00

Palmer Square Capital BDC has a consensus price target of $10.50, indicating a potential upside of 6.37%. Given Palmer Square Capital BDC’s higher possible upside, analysts clearly believe Palmer Square Capital BDC is more favorable than Hennessy Advisors.

Volatility & Risk

Hennessy Advisors has a beta of 0.48, indicating that its share price is 52% less volatile than the S&P 500. Comparatively, Palmer Square Capital BDC has a beta of 0.85, indicating that its share price is 15% less volatile than the S&P 500.

Institutional & Insider Ownership

10.3% of Hennessy Advisors shares are owned by institutional investors. Comparatively, 6.5% of Palmer Square Capital BDC shares are owned by institutional investors. 36.0% of Hennessy Advisors shares are owned by company insiders. Comparatively, 1.1% of Palmer Square Capital BDC shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Hennessy Advisors and Palmer Square Capital BDC”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hennessy Advisors	$33.34 million	2.49	$9.96 million	$1.04	10.12
Palmer Square Capital BDC	-$26.49 million	-11.42	-$3.17 million	($0.99)	-9.97

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

Dividends

Hennessy Advisors pays an annual dividend of $0.60 per share and has a dividend yield of 5.7%. Palmer Square Capital BDC pays an annual dividend of $1.44 per share and has a dividend yield of 14.6%. Hennessy Advisors pays out 57.7% of its earnings in the form of a dividend. Palmer Square Capital BDC pays out -145.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Palmer Square Capital BDC is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Hennessy Advisors beats Palmer Square Capital BDC on 9 of the 14 factors compared between the two stocks.

About Hennessy Advisors

Hennessy Advisors, Inc. is an employee owned investment manager. It provides its services to Hennessy Funds and investment companies. The firm launches and manages equity, fixed income, and balanced mutual funds. It invests in the public equity and fixed income markets across the globe. The firm primarily invests in growth stocks of companies. It conducts in-house research to make its investments. Hennessy Advisors, Inc. was founded in 1989 and is based in Novato, California with additional offices in Boston, Massachusetts and Chapel Hill, North Carolina.

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.