Head to Head Review: Kayne Anderson BDC (NYSE:KBDC) & Carlyle Secured Lending (NASDAQ:CGBD)

Carlyle Secured Lending (NASDAQ:CGBD) and Kayne Anderson BDC (NYSE:KBDC) are both small-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, analyst recommendations, valuation, dividends, risk, profitability and institutional ownership.

Dividends

Carlyle Secured Lending pays an annual dividend of $1.60 per share and has a dividend yield of 14.5%. Kayne Anderson BDC pays an annual dividend of $1.60 per share and has a dividend yield of 10.8%. Carlyle Secured Lending pays out 225.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Kayne Anderson BDC pays out 125.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Earnings & Valuation

This table compares Carlyle Secured Lending and Kayne Anderson BDC”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Carlyle Secured Lending	$255.57 million	2.99	$69.97 million	$0.71	15.51
Kayne Anderson BDC	$235.82 million	4.18	$93.71 million	$1.28	11.62

Kayne Anderson BDC has lower revenue, but higher earnings than Carlyle Secured Lending. Kayne Anderson BDC is trading at a lower price-to-earnings ratio than Carlyle Secured Lending, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings for Carlyle Secured Lending and Kayne Anderson BDC, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Carlyle Secured Lending	0	4	3	0	2.43
Kayne Anderson BDC	0	1	3	0	2.75

Carlyle Secured Lending presently has a consensus target price of $12.50, indicating a potential upside of 13.53%. Kayne Anderson BDC has a consensus target price of $15.38, indicating a potential upside of 3.40%. Given Carlyle Secured Lending’s higher possible upside, research analysts clearly believe Carlyle Secured Lending is more favorable than Kayne Anderson BDC.

Insider & Institutional Ownership

24.5% of Carlyle Secured Lending shares are held by institutional investors. 0.6% of Carlyle Secured Lending shares are held by company insiders. Comparatively, 2.9% of Kayne Anderson BDC shares are held 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.

Profitability

This table compares Carlyle Secured Lending and Kayne Anderson BDC’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Carlyle Secured Lending	19.52%	8.99%	4.01%
Kayne Anderson BDC	37.30%	10.47%	5.14%

Volatility and Risk

Carlyle Secured Lending has a beta of 0.62, suggesting that its share price is 38% less volatile than the S&P 500. Comparatively, Kayne Anderson BDC has a beta of 0.25, suggesting that its share price is 75% less volatile than the S&P 500.

Summary

Kayne Anderson BDC beats Carlyle Secured Lending on 9 of the 15 factors compared between the two stocks.

About Carlyle Secured Lending

Carlyle Secured Lending, Inc. is business development company specializing in first lien debt, senior secured loans, second lien senior secured loan unsecured debt, mezzanine debt and investments in equities. It specializes in directly investing. It specializes in middle market. It targets healthcare and pharmaceutical, aerospace and defense, high tech industries, business services, software, beverage food and tobacco, hotel gamming and leisure, banking finance insurance and in real estate sector. The fund seeks to invest across United States of America, Luxembourg, Cayman Islands, Cyprus, and United Kingdom. It invests in companies with EBITDA between $25 million and $100 million.

About Kayne Anderson BDC

Kayne Anderson BDC Inc. is a business development company which invests primarily in first lien senior secured loans, with a secondary focus on unitranche and split-lien loans to middle market companies. Kayne Anderson BDC Inc. is based in CHICAGO.