Head to Head Contrast: Palmer Square Capital BDC (NYSE:PSBD) and ONEX (OTCMKTS:ONEXF)

ONEX (OTCMKTS:ONEXF) and Palmer Square Capital BDC (NYSE:PSBD) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, profitability, dividends, analyst recommendations, earnings, institutional ownership and valuation.

Insider and Institutional Ownership

0.7% of ONEX shares are owned by institutional investors. Comparatively, 6.5% of Palmer Square Capital BDC shares are owned by institutional investors. 1.1% of Palmer Square Capital BDC shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Risk & Volatility

ONEX has a beta of 1.25, indicating that its share price is 25% more 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.

Valuation & Earnings

This table compares ONEX and Palmer Square Capital BDC”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ONEX	$899.00 million	6.28	$617.00 million	$6.68	11.09
Palmer Square Capital BDC	-$15.81 million	-19.04	-$3.17 million	($0.63)	-15.85

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

Analyst Ratings

This is a summary of current ratings and target prices for ONEX and Palmer Square Capital BDC, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ONEX	0	1	2	0	2.67
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 5.17%. Given Palmer Square Capital BDC’s higher probable upside, analysts plainly believe Palmer Square Capital BDC is more favorable than ONEX.

Dividends

ONEX pays an annual dividend of $0.28 per share and has a dividend yield of 0.4%. Palmer Square Capital BDC pays an annual dividend of $1.44 per share and has a dividend yield of 14.4%. ONEX pays out 4.2% of its earnings in the form of a dividend. Palmer Square Capital BDC pays out -228.6% 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
ONEX	63.83%	5.24%	4.21%
Palmer Square Capital BDC	-18.27%	11.33%	4.13%

Summary

ONEX beats Palmer Square Capital BDC on 10 of the 16 factors compared between the two stocks.

About ONEX

Onex Corporation is a Canadian alternative asset manager focused on private equity and credit. The company manages investment strategies for institutional investors and other clients, and invests its own capital alongside them. Through its private equity business, Onex acquires and builds companies, while its credit platform provides financing and invests across a range of credit markets. Its investment activities span North America and Europe, with portfolio companies operating in multiple industries.

About Palmer Square Capital BDC

Palmer Square Capital BDC, Inc. is an externally managed business development company that seeks to provide financing to private middle-market companies. The company focuses primarily on privately originated and negotiated investments in senior secured loans and other debt instruments, with the goal of supporting businesses while generating current income for shareholders. Palmer Square Capital BDC may invest across a range of industries and capital structures, including first-lien and unitranche loans, second-lien and subordinated debt, and select equity investments.