Reviewing Investcorp Credit Management BDC (NASDAQ:ICMB) and Nuveen Churchill Direct Lending (NYSE:NCDL)

Nuveen Churchill Direct Lending (NYSE:NCDL) and Investcorp Credit Management BDC (NASDAQ:ICMB) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, earnings, institutional ownership, dividends, valuation and risk.

Dividends

Nuveen Churchill Direct Lending pays an annual dividend of $1.80 per share and has a dividend yield of 12.5%. Investcorp Credit Management BDC pays an annual dividend of $0.48 per share and has a dividend yield of 17.4%. Nuveen Churchill Direct Lending pays out 98.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Investcorp Credit Management BDC pays out 88.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Investcorp Credit Management BDC has increased its dividend for 1 consecutive years. Investcorp Credit Management BDC is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

Nuveen Churchill Direct Lending has a beta of 0.38, suggesting that its share price is 62% less volatile than the S&P 500. Comparatively, Investcorp Credit Management BDC has a beta of 0.88, suggesting that its share price is 12% less volatile than the S&P 500.

Earnings & Valuation

This table compares Nuveen Churchill Direct Lending and Investcorp Credit Management BDC”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nuveen Churchill Direct Lending	$224.04 million	3.16	$116.32 million	$1.82	7.89
Investcorp Credit Management BDC	$23.88 million	1.67	$7.79 million	$0.54	5.11

Nuveen Churchill Direct Lending has higher revenue and earnings than Investcorp Credit Management BDC. Investcorp Credit Management BDC is trading at a lower price-to-earnings ratio than Nuveen Churchill Direct Lending, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent recommendations for Nuveen Churchill Direct Lending and Investcorp Credit Management BDC, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nuveen Churchill Direct Lending	0	3	1	0	2.25
Investcorp Credit Management BDC	1	0	0	0	1.00

Nuveen Churchill Direct Lending currently has a consensus target price of $16.00, suggesting a potential upside of 11.46%. Given Nuveen Churchill Direct Lending’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Nuveen Churchill Direct Lending is more favorable than Investcorp Credit Management BDC.

Profitability

This table compares Nuveen Churchill Direct Lending and Investcorp Credit Management BDC’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Nuveen Churchill Direct Lending	43.35%	11.88%	5.25%
Investcorp Credit Management BDC	38.05%	5.59%	2.07%

Insider & Institutional Ownership

7.8% of Investcorp Credit Management BDC shares are owned by institutional investors. 0.6% of Nuveen Churchill Direct Lending shares are owned by company insiders. Comparatively, 1.2% of Investcorp Credit Management BDC shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

Nuveen Churchill Direct Lending beats Investcorp Credit Management BDC on 11 of the 17 factors compared between the two stocks.

About Nuveen Churchill Direct Lending

Nuveen Churchill Direct Lending Corp. is a specialty finance company focused primarily on investing in senior secured loans to private equity-owned U.S. middle market companies. It has elected to be regulated as a business development company. Nuveen Churchill Direct Lending Corp. is based in NEW YORK.

About Investcorp Credit Management BDC

Investcorp Credit Management BDC, Inc. is a business development company specializing in loan, mezzanine, middle market, growth capital, acquisitions, market/product expansion, organic growth, refinancings and recapitalization investments. It also selectively invests in mezzanine loans/structured equity and in the equity of portfolio companies through warrants and other instruments, in most cases taking such upside participation interests as part of a broader investment relationship. The fund typically invests in United States and Europe. Within United States, the fund seeks to invest in Midatlantic, Midwest, Northeast, Southeast, and West Coast regions. The fund primarily invests in cable and satellites; consumer services; healthcare equipment and services; industrials; information technology; telecommunication services; and utilities sectors. The fund seeks to invest between $5 million to $25 million in companies that have annual revenues of at least $50 million with EBITDA at least $15 million.