Comparing Blackstone Secured Lending Fund (NYSE:BXSL) & Main Street Capital (NYSE:MAIN)

Blackstone Secured Lending Fund (NYSE:BXSL) and Main Street Capital (NYSE:MAIN) are both mid-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, earnings, risk, institutional ownership, profitability, analyst recommendations and valuation.

Dividends

Blackstone Secured Lending Fund pays an annual dividend of $3.08 per share and has a dividend yield of 11.6%. Main Street Capital pays an annual dividend of $3.06 per share and has a dividend yield of 5.5%. Blackstone Secured Lending Fund pays out 115.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Main Street Capital pays out 50.7% of its earnings in the form of a dividend. Main Street Capital has raised its dividend for 4 consecutive years.

Earnings and Valuation

This table compares Blackstone Secured Lending Fund and Main Street Capital”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Blackstone Secured Lending Fund	$1.33 billion	4.62	$694.10 million	$2.66	9.98
Main Street Capital	$622.90 million	7.99	$508.08 million	$6.03	9.21

Blackstone Secured Lending Fund has higher revenue and earnings than Main Street Capital. Main Street Capital is trading at a lower price-to-earnings ratio than Blackstone Secured Lending Fund, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Blackstone Secured Lending Fund and Main Street Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Blackstone Secured Lending Fund	42.38%	11.85%	5.32%
Main Street Capital	96.16%	12.70%	6.85%

Risk & Volatility

Blackstone Secured Lending Fund has a beta of 0.42, indicating that its share price is 58% less volatile than the S&P 500. Comparatively, Main Street Capital has a beta of 0.84, indicating that its share price is 16% less volatile than the S&P 500.

Insider and Institutional Ownership

36.5% of Blackstone Secured Lending Fund shares are owned by institutional investors. Comparatively, 20.3% of Main Street Capital shares are owned by institutional investors. 0.1% of Blackstone Secured Lending Fund shares are owned by company insiders. Comparatively, 4.0% of Main Street Capital shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and price targets for Blackstone Secured Lending Fund and Main Street Capital, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Blackstone Secured Lending Fund	0	3	5	0	2.63
Main Street Capital	0	5	2	0	2.29

Blackstone Secured Lending Fund presently has a consensus target price of $29.43, suggesting a potential upside of 10.88%. Main Street Capital has a consensus target price of $59.60, suggesting a potential upside of 7.31%. Given Blackstone Secured Lending Fund’s stronger consensus rating and higher possible upside, analysts plainly believe Blackstone Secured Lending Fund is more favorable than Main Street Capital.

Summary

Main Street Capital beats Blackstone Secured Lending Fund on 9 of the 17 factors compared between the two stocks.

About Blackstone Secured Lending Fund

Blackstone Secured Lending Fund is business development company and a Delaware statutory trust formed on March 26, 2018, and structured as an externally managed, non-diversified closed-end investment Fund. On October 26, 2018, the fund elected to be regulated as a business development company (BDC) under the Investment Company Act of 1940, as amended (the 1940 Act). In addition, the Fund elected to be treated for U.S. federal income tax purposes, as a regulated investment company (RIC), as defined under Subchapter M of the Internal Revenue Code of 1986, as amended (the Code). The fund also intends to continue to comply with the requirements prescribed by the Code in order to maintain tax treatment as a RIC. The fund's investment objectives are to generate current income and, to a lesser extent, long-term capital appreciation. The Fund seeks to achieve its investment objective primarily through originated loans, equity and other securities, including syndicated loans, of private U.S. companies, specifically small and middle market companies, typically in the form of first lien senior secured and unitranche loans (including first out/last out loans), and to a lesser extent, second lien, third lien, unsecured and subordinated loans and other debt and equity securities.

About Main Street Capital

Main Street Capital Corporation is a business development company specializes in equity capital to lower middle market companies. The firm specializing in recapitalizations, management buyouts, refinancing, family estate planning, management buyouts, refinancing, industry consolidation, mature, later stage emerging growth. The firm also provides debt capital to middle market companies for acquisitions, management buyouts, growth financings, recapitalizations, and refinancing. The firm seeks to partner with entrepreneurs, business owners and management teams and generally provides “one stop” financing alternatives within its lower middle market portfolio. It prefers to invest in air freight and logistics, auto components, building products, chemicals, commercial services, computers, construction and engineering, consumer finance, consumer services, electronic equipment, energy equipment and services, financial services, health care equipment, health care providers, hotels, restaurants, and leisure, internet software and services, IT Services, machinery, oil, gas and consumable fuels, paper and forest products, professional and industrial services, road and rail, software, specialty retail, telecommunication, consumer discretionary, energy, materials, technology, and transportation. The firm typically invests in lower middle market companies generally with annual revenues between $10 million and $150 million. It prefers to invest in ranging between $5 million and $100 million in equity investment and enterprise value in ranging between $3 million and $20 million. The firm typically prefers to invest in the range of $5 million and $150 million per transaction in debt investment value and in the range of $3 million and $75 million in annual EBITDA in between $3 million and $25 million in lower middle market $5 million and $75 million in credit solution. The firm’s middle market debt investments are made in businesses that are generally larger in size than its lower middle market portfolio companies. It takes 5 percent minority and up to 50 percent majority equity investments. Main Street Capital Corporation was founded in 2007 and is based in Houston, Texas with an additional office in Chojnów, Poland.