Head to Head Comparison: Kayne Anderson BDC (NYSE:KBDC) & Golub Capital BDC (NASDAQ:GBDC)

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

Analyst Recommendations

This is a breakdown of current recommendations for Kayne Anderson BDC and Golub Capital BDC, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kayne Anderson BDC	0	2	2	0	2.50
Golub Capital BDC	1	1	4	1	2.71

Kayne Anderson BDC presently has a consensus price target of $15.13, suggesting a potential upside of 10.51%. Golub Capital BDC has a consensus price target of $14.00, suggesting a potential upside of 13.87%. Given Golub Capital BDC’s stronger consensus rating and higher possible upside, analysts clearly believe Golub Capital BDC is more favorable than Kayne Anderson BDC.

Dividends

Kayne Anderson BDC pays an annual dividend of $1.60 per share and has a dividend yield of 11.7%. Golub Capital BDC pays an annual dividend of $1.32 per share and has a dividend yield of 10.7%. 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. 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. Kayne Anderson BDC is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider & Institutional Ownership

42.4% of Golub Capital BDC shares are held by institutional investors. 2.9% of Kayne Anderson BDC shares are held by insiders. Comparatively, 1.4% of Golub Capital BDC shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Kayne Anderson BDC and Golub Capital BDC”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kayne Anderson BDC	$235.82 million	3.85	$93.71 million	$1.28	10.69
Golub Capital BDC	$870.78 million	3.68	$376.65 million	$0.77	15.97

Golub Capital BDC has higher revenue and earnings than Kayne Anderson BDC. Kayne Anderson BDC 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.

Risk and Volatility

Kayne Anderson BDC has a beta of 0.25, meaning that its stock price is 75% less volatile than the S&P 500. Comparatively, Golub Capital BDC has a beta of 0.39, meaning that its stock price is 61% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Kayne Anderson BDC	37.30%	10.47%	5.14%
Golub Capital BDC	24.64%	10.20%	4.47%

Summary

Golub Capital BDC beats Kayne Anderson BDC on 9 of the 17 factors compared between the two stocks.

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.

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.