Critical Review: Barings BDC (BBDC) and Its Peers

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Barings BDC (NYSE: BBDC) is one of 54 publicly-traded companies in the “Investment advice” industry, but how does it contrast to its competitors? We will compare Barings BDC to related companies based on the strength of its analyst recommendations, valuation, risk, profitability, dividends, institutional ownership and earnings.

Valuation & Earnings

This table compares Barings BDC and its competitors revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Barings BDC $123.00 million -$28.65 million 6.43
Barings BDC Competitors $2.35 billion $251.15 million 11.66

Barings BDC’s competitors have higher revenue and earnings than Barings BDC. Barings BDC is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Profitability

This table compares Barings BDC and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Barings BDC -3.56% 9.00% 4.93%
Barings BDC Competitors 13.65% 18.48% 10.33%

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Barings BDC and its competitors, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Barings BDC 0 1 1 0 2.50
Barings BDC Competitors 438 1992 2358 124 2.44

Barings BDC presently has a consensus price target of $13.00, indicating a potential upside of 30.39%. As a group, “Investment advice” companies have a potential upside of 37.26%. Given Barings BDC’s competitors higher possible upside, analysts clearly believe Barings BDC has less favorable growth aspects than its competitors.

Institutional & Insider Ownership

36.9% of Barings BDC shares are held by institutional investors. Comparatively, 46.2% of shares of all “Investment advice” companies are held by institutional investors. 3.5% of Barings BDC shares are held by company insiders. Comparatively, 18.5% of shares of all “Investment advice” companies are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Dividends

Barings BDC pays an annual dividend of $0.12 per share and has a dividend yield of 1.2%. Barings BDC pays out 7.7% of its earnings in the form of a dividend. As a group, “Investment advice” companies pay a dividend yield of 3.9% and pay out 43.0% of their earnings in the form of a dividend.

Risk & Volatility

Barings BDC has a beta of 0.79, indicating that its stock price is 21% less volatile than the S&P 500. Comparatively, Barings BDC’s competitors have a beta of 1.14, indicating that their average stock price is 14% more volatile than the S&P 500.

Summary

Barings BDC competitors beat Barings BDC on 12 of the 15 factors compared.

About Barings BDC

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.

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