Palmer Square Capital BDC (NYSE:PSBD) versus Golub Capital BDC (NASDAQ:GBDC) Head-To-Head Comparison

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

Risk & Volatility

Palmer Square Capital BDC has a beta of 0.82, indicating that its share price is 18% less volatile than the S&P 500. Comparatively, Golub Capital BDC has a beta of 0.48, indicating that its share price is 52% less volatile than the S&P 500.

Dividends

Palmer Square Capital BDC pays an annual dividend of $1.44 per share and has a dividend yield of 11.8%. Golub Capital BDC pays an annual dividend of $1.56 per share and has a dividend yield of 11.3%. Palmer Square Capital BDC pays out 257.1% 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 109.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Recommendations

This is a breakdown of current ratings for Palmer Square Capital BDC and Golub Capital BDC, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Palmer Square Capital BDC	0	2	2	0	2.50
Golub Capital BDC	0	1	2	0	2.67

Palmer Square Capital BDC presently has a consensus price target of $14.38, indicating a potential upside of 17.97%. Golub Capital BDC has a consensus price target of $15.00, indicating a potential upside of 8.77%. Given Palmer Square Capital BDC’s higher probable upside, equities research analysts plainly believe Palmer Square Capital BDC is more favorable than Golub Capital BDC.

Earnings & Valuation

This table compares Palmer Square Capital BDC and Golub Capital BDC”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Palmer Square Capital BDC	$143.51 million	2.73	$47.67 million	$0.56	21.76
Golub Capital BDC	$724.68 million	5.07	$273.79 million	$1.42	9.71

Golub Capital BDC has higher revenue and earnings than Palmer Square Capital BDC. Golub Capital BDC is trading at a lower price-to-earnings ratio than Palmer Square Capital BDC, indicating that it is currently the more affordable of the two stocks.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Palmer Square Capital BDC	13.51%	10.91%	4.15%
Golub Capital BDC	42.81%	10.87%	4.87%

Institutional and Insider Ownership

6.5% of Palmer Square Capital BDC shares are held by institutional investors. Comparatively, 42.4% of Golub Capital BDC shares are held by institutional investors. 1.0% of Palmer Square Capital BDC shares are held by company insiders. Comparatively, 3.6% of Golub Capital BDC shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Golub Capital BDC beats Palmer Square Capital BDC on 10 of the 15 factors compared between the two stocks.

About Palmer Square Capital BDC

Palmer Square Capital BDC Inc. is an externally managed, non-diversified closed-end management investment company which primarily lends to and invests in corporate debt securities, including small to large private U.S. companies and has elected to be regulated as a business development company. Palmer Square Capital BDC Inc. is based in MISSION WOODS, Kan.

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.