Alcentra Capital Corp. (NASDAQ: ABDC) and GSV Capital Corp (NASDAQ:GSVC) are both finance companies, but which is the better stock? We will contrast the two companies based on the strength of their earnings, profitability, institutional ownership, analyst recommendations, valuation, dividends and risk.
Profitability
This table compares Alcentra Capital Corp. and GSV Capital Corp’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Alcentra Capital Corp. | -2.77% | 11.13% | 6.86% |
| GSV Capital Corp | -1,701.22% | -5.43% | -3.25% |
Analyst Ratings
This is a breakdown of recent ratings and price targets for Alcentra Capital Corp. and GSV Capital Corp, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Alcentra Capital Corp. | 0 | 3 | 2 | 0 | 2.40 |
| GSV Capital Corp | 0 | 1 | 0 | 0 | 2.00 |
Alcentra Capital Corp. currently has a consensus price target of $13.50, suggesting a potential upside of 28.94%. Given Alcentra Capital Corp.’s stronger consensus rating and higher possible upside, equities analysts plainly believe Alcentra Capital Corp. is more favorable than GSV Capital Corp.
Earnings and Valuation
This table compares Alcentra Capital Corp. and GSV Capital Corp’s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| Alcentra Capital Corp. | N/A | N/A | N/A | ($0.08) | -130.88 |
| GSV Capital Corp | N/A | N/A | N/A | ($1.09) | -4.27 |
Alcentra Capital Corp. is trading at a lower price-to-earnings ratio than GSV Capital Corp, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
28.4% of Alcentra Capital Corp. shares are held by institutional investors. Comparatively, 29.6% of GSV Capital Corp shares are held by institutional investors. 5.0% of Alcentra Capital Corp. shares are held by insiders. Comparatively, 0.5% of GSV Capital Corp shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Risk & Volatility
Alcentra Capital Corp. has a beta of 0.7, suggesting that its stock price is 30% less volatile than the S&P 500. Comparatively, GSV Capital Corp has a beta of 1.26, suggesting that its stock price is 26% more volatile than the S&P 500.
Dividends
Alcentra Capital Corp. pays an annual dividend of $1.36 per share and has a dividend yield of 13.0%. GSV Capital Corp does not pay a dividend. Alcentra Capital Corp. pays out -1,700.0% of its earnings in the form of a dividend.
Summary
Alcentra Capital Corp. beats GSV Capital Corp on 10 of the 12 factors compared between the two stocks.
About Alcentra Capital Corp.
Alcentra Capital Corporation is a specialty finance company that operates as a non-diversified, closed-end management investment company. The Company operates as a business development company and a regulated investment company. It provides customized debt and equity financing solutions to lower middle-market companies, which are companies having annual earnings, before interest, taxes, depreciation and amortization of between $5 million and $15 million, and/or revenues of between $10 million and $100 million. Its investments range in size from $5 million to $15 million. Its investment objective is to generate both current income and capital appreciation primarily by making direct investments in lower middle-market companies in the form of senior debt, unitranche, second lien, subordinated debt and, to a lesser extent, senior debt and minority equity investments. Its investment focus is to make loans to, and selected equity investments in, privately-held lower-middle-market companies.
About GSV Capital Corp
GSV Capital Corp. (GSV Capital) is an externally managed, non-diversified closed-end management investment company. The Company’s investment objective is to maximize its portfolio’s total return, principally by seeking capital gains on its equity and equity-related investments. The Company invests principally in the equity securities, which are venture-capital-backed emerging companies. The Company acquires its investments through direct investments with portfolio companies, secondary marketplaces for private companies and negotiations with selling stockholders. The Company may also invest in select publicly traded equity securities or certain non-United States companies that otherwise meet its investment criteria. It seeks to invest approximately 90% of its portfolio in late-stage companies and the remaining approximately 10% in emerging companies that fit within its targeted areas. Its investment activities are managed by its investment advisor, GSV Asset Management, LLC.
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