Comparing Site Centers (NYSE:SITC) & Gladstone Capital (NASDAQ:GLAD)

Gladstone Capital (NASDAQ:GLAD) and Site Centers (NYSE:SITC) are both small-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their risk, institutional ownership, profitability, earnings, dividends, valuation and analyst recommendations.

Institutional and Insider Ownership

10.7% of Gladstone Capital shares are owned by institutional investors. Comparatively, 88.7% of Site Centers shares are owned by institutional investors. 3.8% of Gladstone Capital shares are owned by company insiders. Comparatively, 0.2% of Site Centers shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Gladstone Capital and Site Centers”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Gladstone Capital	$89.12 million	4.69	$58.11 million	$2.06	8.98
Site Centers	$113.49 million	1.65	$177.86 million	$2.41	1.48

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

Profitability

This table compares Gladstone Capital and Site Centers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Gladstone Capital	50.48%	9.67%	5.00%
Site Centers	219.18%	40.56%	27.81%

Volatility and Risk

Gladstone Capital has a beta of 0.94, meaning that its stock price is 6% less volatile than the S&P 500. Comparatively, Site Centers has a beta of 0.97, meaning that its stock price is 3% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings for Gladstone Capital and Site Centers, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Gladstone Capital	0	3	3	0	2.50
Site Centers	2	1	0	0	1.33

Gladstone Capital presently has a consensus price target of $21.67, indicating a potential upside of 17.12%. Site Centers has a consensus price target of $3.50, indicating a potential downside of 1.99%. Given Gladstone Capital’s stronger consensus rating and higher probable upside, research analysts plainly believe Gladstone Capital is more favorable than Site Centers.

Summary

Site Centers beats Gladstone Capital on 8 of the 14 factors compared between the two stocks.

About Gladstone Capital

Gladstone Capital Corporation is a business development company specializing in lower middle market, growth capital, add on acquisitions, change of control, buy & build strategies, debt refinancing, debt investments in senior term loans, revolving loans, secured first and second lien term loans, senior subordinated loans, unitranche loans, junior subordinated loans, and mezzanine loans and equity investments in the form of common stock, preferred stock, limited liability company interests, or warrants. It operates as a business development company. The fund also makes private equity investments in acquisitions, buyouts and recapitalizations, and refinancing existing debts. It targets small and medium-sized companies in United States. It is industry agnostic and seeks to invest in companies engaged in the business services, light and specialty manufacturing, niche industrial products and services, specialty consumer products and services, energy services, transportation and logistics, healthcare and education services, specialty chemicals, media and communications and aerospace and defense. The fund seeks to invest between $7 million and $30 million in companies that have between $20 million and $150 million in sales and EBITDA between $3 million and $25 million. It prefers to acquire minority stakes. It seeks to exit its investments through strategic acquisitions by other industry participants or financial buyers, initial public offerings of common stock, or other capital market transactions.

About Site Centers

SITE Centers is an owner and manager of open-air shopping centers located in suburban, high household income communities. The Company is a self-administered and self-managed REIT operating as a fully integrated real estate company, and is publicly traded on the New York Stock Exchange under the ticker symbol SITC.