Golub Capital BDC (NASDAQ:GBDC) vs. CION Investment (NYSE:CION) Head to Head Contrast

Golub Capital BDC (NASDAQ:GBDC) and CION Investment (NYSE:CION) are both finance companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, valuation, risk, institutional ownership, analyst recommendations, earnings and profitability.

Analyst Ratings

This is a breakdown of recent ratings for Golub Capital BDC and CION Investment, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Golub Capital BDC	1	1	4	1	2.71
CION Investment	3	0	0	0	1.00

Golub Capital BDC currently has a consensus price target of $14.00, suggesting a potential upside of 6.95%. CION Investment has a consensus price target of $6.50, suggesting a potential downside of 4.34%. Given Golub Capital BDC’s stronger consensus rating and higher possible upside, analysts clearly believe Golub Capital BDC is more favorable than CION Investment.

Profitability

This table compares Golub Capital BDC and CION Investment’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Golub Capital BDC	24.64%	10.20%	4.47%
CION Investment	-0.41%	11.96%	4.64%

Volatility and Risk

Golub Capital BDC has a beta of 0.41, indicating that its share price is 59% less volatile than the S&P 500. Comparatively, CION Investment has a beta of 1.16, indicating that its share price is 16% more volatile than the S&P 500.

Dividends

Golub Capital BDC pays an annual dividend of $1.32 per share and has a dividend yield of 10.1%. CION Investment pays an annual dividend of $1.20 per share and has a dividend yield of 17.7%. Golub Capital BDC pays out 171.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. CION Investment pays out -3,000.0% of its earnings in the form of a dividend. CION Investment has increased its dividend for 1 consecutive years. CION Investment is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

42.4% of Golub Capital BDC shares are owned by institutional investors. Comparatively, 32.0% of CION Investment shares are owned by institutional investors. 1.4% of Golub Capital BDC shares are owned by company insiders. Comparatively, 0.6% of CION Investment shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Golub Capital BDC and CION Investment”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Golub Capital BDC	$870.78 million	3.92	$376.65 million	$0.77	17.00
CION Investment	$240.82 million	1.40	-$20.63 million	($0.04)	-169.88

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

Summary

Golub Capital BDC beats CION Investment on 12 of the 18 factors compared between the two stocks.

About Golub Capital BDC

Golub Capital BDC, Inc. (GBDC) is a business development company and operates as an externally managed closed-end non-diversified management investment company. It invests in debt and minority equity investments in middle-market companies that are, in most cases, sponsored by private equity investors. It typically invests in diversified consumer services, automobiles, healthcare technology, insurance, health care equipment and supplies, hotels, restaurants and leisure, healthcare providers and services, IT services and specialty retails. It seeks to invest in the United States. It primarily invests in first lien traditional senior debt, first lien one stop, junior debt and equity, senior secured, one stop, unitranche, second lien, subordinated and mezzanine loans of middle-market companies, and warrants.

About CION Investment

CION Investment Corporation is a business development company. It specializes in investments in senior secured loans, including unitranche loans, First Lien, second lien loans, long-term subordinated loans, and mezzanine loans; equity interests such as warrants or options; and corporate bonds; and other debt securities in middle-market companies. The firm invests in growth capital, acquisitions, leveraged buyouts, market/product expansion, refinancing and recapitalization. The fund also invests up to 30 percent of their assets opportunistically in other types of investments, including the securities of larger public companies and foreign securities. It also makes investments in the secondary loan market. The fund does not invest in start-up companies, turnaround situations, or companies with speculative business plans. The fund prefers to invest in high tech industries, healthcare, pharmaceuticals, business services, media, chemicals, plastic, rubber, telecommunication, consumer services, advertising, printing and publishing, consumer goods, durables, diversified financials, and other industries. It also invests in homebuilding, restaurants, beverage and tobacco bars, broadcasting, distributors, Non-durable good distribution, food beverage and tobacco, energy, oil gas and consumables fuels, insurance, aerospace and defense, industrial machinery, paper and forest product machinery, information technology, metals and mining, and real estate. It primarily seeks to invest in the United States. The fund seeks to invest between $5 million and $50 million in companies with an EBITDA between $25 million and $75 million with average targeted hold of $25 million. It also purchases minority interests in the form of common or preferred equity in the target companies, typically in conjunction with its debt investments or through a co-investment with a financial sponsor. The fund seeks to exit its investments through an initial public offering of common stock, a merger, a sale, or other recapitalization.