Kayne Anderson BDC (NYSE:KBDC) and Runway Growth Finance (NASDAQ:RWAY) Head to Head Contrast

Kayne Anderson BDC (NYSE:KBDC) and Runway Growth Finance (NASDAQ:RWAY) are both small-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, profitability, earnings, dividends, institutional ownership, analyst recommendations and risk.

Dividends

Kayne Anderson BDC pays an annual dividend of $1.60 per share and has a dividend yield of 11.5%. Runway Growth Finance pays an annual dividend of $1.32 per share and has a dividend yield of 13.6%. Kayne Anderson BDC pays out 94.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Runway Growth Finance pays out 69.5% of its earnings in the form of a dividend. Runway Growth Finance is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk & Volatility

Kayne Anderson BDC has a beta of 0.14, indicating that its stock price is 86% less volatile than the S&P 500. Comparatively, Runway Growth Finance has a beta of 0.67, indicating that its stock price is 33% less volatile than the S&P 500.

Valuation & Earnings

This table compares Kayne Anderson BDC and Runway Growth Finance”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kayne Anderson BDC	$213.11 million	4.61	$131.94 million	$1.69	8.24
Runway Growth Finance	$144.63 million	2.43	$73.61 million	$1.90	5.10

Kayne Anderson BDC has higher revenue and earnings than Runway Growth Finance. Runway Growth Finance is trading at a lower price-to-earnings ratio than Kayne Anderson BDC, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current ratings and target prices for Kayne Anderson BDC and Runway Growth Finance, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kayne Anderson BDC	0	1	3	0	2.75
Runway Growth Finance	0	4	3	0	2.43

Kayne Anderson BDC currently has a consensus target price of $16.50, indicating a potential upside of 18.42%. Runway Growth Finance has a consensus target price of $11.20, indicating a potential upside of 15.58%. Given Kayne Anderson BDC’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Kayne Anderson BDC is more favorable than Runway Growth Finance.

Profitability

This table compares Kayne Anderson BDC and Runway Growth Finance’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Kayne Anderson BDC	52.99%	10.90%	5.97%
Runway Growth Finance	51.03%	11.86%	5.66%

Insider and Institutional Ownership

64.6% of Runway Growth Finance shares are owned by institutional investors. 3.2% of Kayne Anderson BDC shares are owned by insiders. Comparatively, 1.0% of Runway Growth Finance shares are owned 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.

Summary

Kayne Anderson BDC beats Runway Growth Finance on 9 of the 15 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 Runway Growth Finance

Runway Growth Finance Corp. is a business development company specializing investments in senior-secured loans to late stage and growth companies. It prefers to make investments in companies engaged in the technology, life sciences, healthcare and information services, business services and select consumer services and products sectors. It prefers to investments in companies engaged in electronic equipment and instruments, systems software, hardware, storage and peripherals and specialized consumer services, application software, healthcare technology, internet software and services, data processing and outsourced services, internet retail, human resources and employment services, biotechnology, healthcare equipment and education services. It invests in senior secured loans between $10 million and $75 million.