Crescent Capital BDC (NASDAQ:CCAP) & Morgan Stanley Direct Lending Fund (NYSE:MSDL) Head to Head Contrast

Morgan Stanley Direct Lending Fund (NYSE:MSDL) and Crescent Capital BDC (NASDAQ:CCAP) are both small-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, institutional ownership, dividends, analyst recommendations, profitability, valuation and risk.

Profitability

This table compares Morgan Stanley Direct Lending Fund and Crescent Capital BDC’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Morgan Stanley Direct Lending Fund	35.92%	10.21%	4.70%
Crescent Capital BDC	20.84%	9.76%	4.30%

Dividends

Morgan Stanley Direct Lending Fund pays an annual dividend of $2.00 per share and has a dividend yield of 11.5%. Crescent Capital BDC pays an annual dividend of $1.68 per share and has a dividend yield of 11.2%. Morgan Stanley Direct Lending Fund pays out 121.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Crescent 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. Crescent Capital BDC has increased its dividend for 1 consecutive years. Morgan Stanley Direct Lending Fund is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a summary of recent recommendations and price targets for Morgan Stanley Direct Lending Fund and Crescent Capital BDC, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Morgan Stanley Direct Lending Fund	0	5	2	0	2.29
Crescent Capital BDC	0	2	3	1	2.83

Morgan Stanley Direct Lending Fund presently has a consensus price target of $17.75, suggesting a potential upside of 2.28%. Crescent Capital BDC has a consensus price target of $16.38, suggesting a potential upside of 9.46%. Given Crescent Capital BDC’s stronger consensus rating and higher possible upside, analysts clearly believe Crescent Capital BDC is more favorable than Morgan Stanley Direct Lending Fund.

Earnings & Valuation

This table compares Morgan Stanley Direct Lending Fund and Crescent Capital BDC”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Morgan Stanley Direct Lending Fund	$416.08 million	3.62	$215.56 million	$1.65	10.52
Crescent Capital BDC	$197.36 million	2.80	$73.65 million	$0.98	15.27

Morgan Stanley Direct Lending Fund has higher revenue and earnings than Crescent Capital BDC. Morgan Stanley Direct Lending Fund is trading at a lower price-to-earnings ratio than Crescent Capital BDC, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

49.5% of Crescent Capital BDC shares are held by institutional investors. 0.2% of Morgan Stanley Direct Lending Fund shares are held by company insiders. Comparatively, 1.1% of Crescent Capital BDC shares are held 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.

Risk and Volatility

Morgan Stanley Direct Lending Fund has a beta of 0.25, meaning that its share price is 75% less volatile than the S&P 500. Comparatively, Crescent Capital BDC has a beta of 0.55, meaning that its share price is 45% less volatile than the S&P 500.

About Morgan Stanley Direct Lending Fund

Morgan Stanley Direct Lending Fund is a business development company. It is a non-diversified, externally managed specialty finance company focused on lending to middle-market companies. Morgan Stanley Direct Lending Fund is based in NEW YORK.

About Crescent Capital BDC

Crescent Capital BDC, Inc. is as a business development company private equity / buyouts and loan fund. It specializes in directly investing. It specializes in middle market. The fund seeks to invest in United States.