Blackrock Tcp Capital (NASDAQ:TCPC) and Runway Growth Finance (NASDAQ:RWAY) Financial Contrast

Runway Growth Finance (NASDAQ:RWAY) and Blackrock Tcp Capital (NASDAQ:TCPC) are both small-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their valuation, earnings, risk, dividends, institutional ownership, analyst recommendations and profitability.

Profitability

This table compares Runway Growth Finance and Blackrock Tcp Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Runway Growth Finance	38.92%	11.94%	5.80%
Blackrock Tcp Capital	-4.20%	15.27%	6.15%

Volatility and Risk

Runway Growth Finance has a beta of 0.67, meaning that its stock price is 33% less volatile than the S&P 500. Comparatively, Blackrock Tcp Capital has a beta of 0.87, meaning that its stock price is 13% less volatile than the S&P 500.

Institutional & Insider Ownership

64.6% of Runway Growth Finance shares are held by institutional investors. 1.0% of Runway Growth Finance shares are held by company insiders. Comparatively, 0.2% of Blackrock Tcp Capital shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Runway Growth Finance and Blackrock Tcp Capital”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Runway Growth Finance	$144.63 million	2.33	$73.61 million	$1.47	6.34
Blackrock Tcp Capital	$259.44 million	1.98	-$63.14 million	($0.13)	-46.69

Runway Growth Finance has higher earnings, but lower revenue than Blackrock Tcp Capital. Blackrock Tcp Capital is trading at a lower price-to-earnings ratio than Runway Growth Finance, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Runway Growth Finance and Blackrock Tcp Capital, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Runway Growth Finance	0	4	3	0	2.43
Blackrock Tcp Capital	2	1	0	0	1.33

Runway Growth Finance presently has a consensus target price of $11.10, indicating a potential upside of 19.10%. Blackrock Tcp Capital has a consensus target price of $6.50, indicating a potential upside of 7.08%. Given Runway Growth Finance’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Runway Growth Finance is more favorable than Blackrock Tcp Capital.

Dividends

Runway Growth Finance pays an annual dividend of $1.32 per share and has a dividend yield of 14.2%. Blackrock Tcp Capital pays an annual dividend of $1.00 per share and has a dividend yield of 16.5%. Runway Growth Finance pays out 89.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Blackrock Tcp Capital pays out -769.2% of its earnings in the form of a dividend. Blackrock Tcp Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Runway Growth Finance beats Blackrock Tcp Capital on 10 of the 16 factors compared between the two stocks.

About Runway Growth Finance

Runway Growth Finance Corp. is a business development company specializing investments in senior-secured loans to late stage and growth companies. It prefers to make investments in companies engaged in the technology, life sciences, healthcare and information services, business services and select consumer services and products sectors. It prefers to investments in companies engaged in electronic equipment and instruments, systems software, hardware, storage and peripherals and specialized consumer services, application software, healthcare technology, internet software and services, data processing and outsourced services, internet retail, human resources and employment services, biotechnology, healthcare equipment and education services. It invests in senior secured loans between $10 million and $75 million.

About Blackrock Tcp Capital

BlackRock TCP Capital Corp. is a business development company specializing in direct equity and debt investments in middle-market, small businesses, debt securities, senior secured loans, junior loans, originated loans, mezzanine, senior debt instruments, bonds, and secondary-market investments. It typically invests in communication services, public relations services, television, wireless telecommunication services, apparel, textile mills, restaurants, retailing, energy, oil and gas extraction, Patent owners and Lessors, Federal and Federally- Sponsored Credit agencies, insurance, hospital and healthcare centers, Biotechnology, engineering services, heavy electrical equipment, tax accounting, scientific and related consulting services, charter freight air transportation, Information technology consulting, application hosting services, software diagram and design, computer aided design, communication equipment, electronics manufacturing equipment, computer components, chemicals. It seeks to invest in the United States. The fund typically invests between $10 million and $35 million in companies with enterprise values between $100 million and $1500 million including complex situations. It prefers to make equity investments in companies for an ownership stake.