Barings BDC (NYSE:BBDC) and Westwood Holdings Group (NYSE:WHG) are both small-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their profitability, institutional ownership, dividends, risk, earnings, analyst recommendations and valuation.
Valuation and Earnings
This table compares Barings BDC and Westwood Holdings Group’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Barings BDC||$80.22 million||6.36||-$114.28 million||N/A||N/A|
|Westwood Holdings Group||$122.30 million||2.74||$26.75 million||N/A||N/A|
Westwood Holdings Group has higher revenue and earnings than Barings BDC.
This table compares Barings BDC and Westwood Holdings Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Westwood Holdings Group||21.87%||17.83%||15.44%|
Barings BDC pays an annual dividend of $0.48 per share and has a dividend yield of 4.8%. Westwood Holdings Group pays an annual dividend of $2.88 per share and has a dividend yield of 7.8%. Westwood Holdings Group has increased its dividend for 8 consecutive years. Westwood Holdings Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Institutional and Insider Ownership
66.0% of Barings BDC shares are owned by institutional investors. Comparatively, 66.0% of Westwood Holdings Group shares are owned by institutional investors. 0.3% of Barings BDC shares are owned by company insiders. Comparatively, 9.7% of Westwood Holdings Group 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.
Volatility and Risk
Barings BDC has a beta of 0.79, suggesting that its share price is 21% less volatile than the S&P 500. Comparatively, Westwood Holdings Group has a beta of 1.38, suggesting that its share price is 38% more volatile than the S&P 500.
This is a breakdown of current ratings for Barings BDC and Westwood Holdings Group, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Westwood Holdings Group||0||0||0||0||N/A|
Barings BDC currently has a consensus price target of $11.20, indicating a potential upside of 12.60%. Given Barings BDC’s higher probable upside, analysts clearly believe Barings BDC is more favorable than Westwood Holdings Group.
Westwood Holdings Group beats Barings BDC on 10 of the 14 factors compared between the two stocks.
Barings BDC Company Profile
Barings BDC, Inc. (NYSE:BBDC) is a business development company specializing in private equity and mezzanine investments. It focuses on leveraged buyouts, management buyouts, ESOPs, change of control transactions, acquisition financings, growth financing, and recapitalizations in lower middle market, mature, and later stage companies. The firm prefers to make investments in many business sectors including manufacturing, distribution, transportation, energy, communications, health services, restaurants, media, and others. It primarily invests in companies located throughout the United States, with an emphasis on the Southeast and Midatlantic. The firm makes equity investments between $1 million and $25 million and debt investments between $5 million and $30 million per transaction, in companies having annual revenues between $20 million and $200 million and EBITDA between $3 million and $35 million and can also co-invest. It typically makes investments between $5 million and $35 million. It primarily invests in senior subordinated debt securities secured by second lien security interests in portfolio company assets, coupled with equity interests. The firm also invests in senior debt securities secured by first lien security interests in portfolio companies. Triangle Capital Corporation was incorporated on October 10, 2006 and is based in Raleigh, North Carolina.
Westwood Holdings Group Company Profile
Westwood Holdings Group, Inc., through its subsidiaries, manages investment assets and provides services for its clients. The company operates in two segments, Advisory and Trust. The Advisory segment provides investment advisory services to corporate retirement plans, public retirement plans, endowments, foundations, individuals, and the Westwood Funds; and investment sub-advisory services to mutual funds, pooled investment vehicles, and its Trust segment. The Trust segment offers trust and custodial services; and participates in common trust funds that it sponsors to institutions and high net worth individuals. Westwood Holdings Group, Inc. was founded in 1983 and is based in Dallas, Texas.
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