Rand Capital (NASDAQ:RAND) & Blackstone Secured Lending Fund (NYSE:BXSL) Financial Analysis

Rand Capital (NASDAQ:RAND) and Blackstone Secured Lending Fund (NYSE:BXSL) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, risk, valuation, dividends and profitability.

Insider and Institutional Ownership

36.5% of Blackstone Secured Lending Fund shares are held by institutional investors. 68.2% of Rand Capital shares are held by insiders. Comparatively, 0.1% of Blackstone Secured Lending Fund shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Rand Capital and Blackstone Secured Lending Fund’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Rand Capital	97.28%	6.89%	5.98%
Blackstone Secured Lending Fund	47.80%	12.49%	5.67%

Dividends

Rand Capital pays an annual dividend of $1.16 per share and has a dividend yield of 7.4%. Blackstone Secured Lending Fund pays an annual dividend of $3.08 per share and has a dividend yield of 9.9%. Rand Capital pays out 36.6% of its earnings in the form of a dividend. Blackstone Secured Lending Fund pays out 97.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Risk and Volatility

Rand Capital has a beta of 0.25, meaning that its share price is 75% less volatile than the S&P 500. Comparatively, Blackstone Secured Lending Fund has a beta of 0.47, meaning that its share price is 53% less volatile than the S&P 500.

Valuation and Earnings

This table compares Rand Capital and Blackstone Secured Lending Fund”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rand Capital	$8.56 million	5.41	$8.83 million	$3.17	4.91
Blackstone Secured Lending Fund	$1.33 billion	5.37	$694.10 million	$3.17	9.85

Blackstone Secured Lending Fund has higher revenue and earnings than Rand Capital. Rand Capital is trading at a lower price-to-earnings ratio than Blackstone Secured Lending Fund, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent recommendations for Rand Capital and Blackstone Secured Lending Fund, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rand Capital	0	0	0	0	0.00
Blackstone Secured Lending Fund	0	2	4	0	2.67

Blackstone Secured Lending Fund has a consensus price target of $31.38, indicating a potential upside of 0.48%. Given Blackstone Secured Lending Fund’s stronger consensus rating and higher probable upside, analysts plainly believe Blackstone Secured Lending Fund is more favorable than Rand Capital.

Summary

Blackstone Secured Lending Fund beats Rand Capital on 10 of the 15 factors compared between the two stocks.

About Rand Capital

Rand Capital Corporation is a business development company specializing in subordinated debt with warrants or preferred equity and venture capital investments. Within private equity, the firm specializing in capital growth and lower middle market investments. Within venture capital, it specializing in early to late-stage private businesses. It does not prefer to invest in real estate sector. It prefers to invest in software, professional services, manufacturing, consumer, healthcare, automotive and public d stocks. It prefers to invest in East or Midwest U.S. operations sectors. It typically invests between $0.75 million and $5 million with initial target size of $1.5 million. It seeks to invest in companies having more than $2 million in revenue or having excess of $1.5 million and up to $5 million in EBITDA. It prefers to be a minority stake and seeks to take a Board seat in its portfolio companies. It typically holds its investments for a period up to five years.

About Blackstone Secured Lending Fund

Blackstone Secured Lending Fund is business development company and a Delaware statutory trust formed on March 26, 2018, and structured as an externally managed, non-diversified closed-end investment Fund. On October 26, 2018, the fund elected to be regulated as a business development company (BDC) under the Investment Company Act of 1940, as amended (the 1940 Act). In addition, the Fund elected to be treated for U.S. federal income tax purposes, as a regulated investment company (RIC), as defined under Subchapter M of the Internal Revenue Code of 1986, as amended (the Code). The fund also intends to continue to comply with the requirements prescribed by the Code in order to maintain tax treatment as a RIC. The fund's investment objectives are to generate current income and, to a lesser extent, long-term capital appreciation. The Fund seeks to achieve its investment objective primarily through originated loans, equity and other securities, including syndicated loans, of private U.S. companies, specifically small and middle market companies, typically in the form of first lien senior secured and unitranche loans (including first out/last out loans), and to a lesser extent, second lien, third lien, unsecured and subordinated loans and other debt and equity securities.