Head-To-Head Contrast: Medallion Financial (NASDAQ:MFIN) & Goldman Sachs BDC (NYSE:GSBD)

Medallion Financial (NASDAQ:MFIN) and Goldman Sachs BDC (NYSE:GSBD) are both small-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, profitability, earnings, analyst recommendations, risk and institutional ownership.

Volatility & Risk

Medallion Financial has a beta of 1.38, suggesting that its share price is 38% more volatile than the S&P 500. Comparatively, Goldman Sachs BDC has a beta of 0.73, suggesting that its share price is 27% less volatile than the S&P 500.

Profitability

This table compares Medallion Financial and Goldman Sachs BDC’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Medallion Financial	12.62%	9.04%	1.46%
Goldman Sachs BDC	36.17%	13.95%	6.17%

Analyst Ratings

This is a summary of recent ratings and recommmendations for Medallion Financial and Goldman Sachs BDC, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Medallion Financial	0	1	1	0	2.50
Goldman Sachs BDC	2	1	0	0	1.33

Medallion Financial currently has a consensus price target of $12.00, suggesting a potential upside of 19.76%. Goldman Sachs BDC has a consensus price target of $10.00, suggesting a potential upside of 2.09%. Given Medallion Financial’s stronger consensus rating and higher probable upside, analysts clearly believe Medallion Financial is more favorable than Goldman Sachs BDC.

Valuation & Earnings

This table compares Medallion Financial and Goldman Sachs BDC”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Medallion Financial	$302.03 million	0.77	$35.88 million	$1.76	5.69
Goldman Sachs BDC	$434.37 million	2.57	$62.87 million	$1.26	7.77

Goldman Sachs BDC has higher revenue and earnings than Medallion Financial. Medallion Financial is trading at a lower price-to-earnings ratio than Goldman Sachs BDC, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

40.6% of Medallion Financial shares are held by institutional investors. Comparatively, 28.7% of Goldman Sachs BDC shares are held by institutional investors. 24.6% of Medallion Financial shares are held by company insiders. Comparatively, 0.1% of Goldman Sachs 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.

Dividends

Medallion Financial pays an annual dividend of $0.48 per share and has a dividend yield of 4.8%. Goldman Sachs BDC pays an annual dividend of $1.28 per share and has a dividend yield of 13.1%. Medallion Financial pays out 27.3% of its earnings in the form of a dividend. Goldman Sachs BDC pays out 101.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

About Medallion Financial

Medallion Financial Corp., together with its subsidiaries, operates as a specialty finance company in the United States. It operates in four segments: Recreation Lending, Home Improvement Lending, Commercial Lending, and Taxi Medallion Lending. The company offers loans that finance consumer purchases of recreational vehicles, boats, and other consumer recreational equipment; consumer financing for window, siding, and roof replacement, swimming pool installations, and other home improvement projects; senior and subordinated loans for the purchase of equipment and related assets necessary to open a new business, or purchase or improvement of an existing business; and taxi medallion loans to individuals and small to mid-size businesses. It also provides debt, mezzanine, and equity investment capital to companies in various commercial industries; and raises deposits and conducts other banking activities. Medallion Financial Corp. was incorporated in 1995 and is headquartered in New York City, New York.

About Goldman Sachs BDC

Goldman Sachs BDC, Inc. is a business development company specializing in middle market and mezzanine investment in private companies. It seeks to make capital appreciation through direct originations of secured debt, senior secured debt, junior secured debt, including first lien, first lien/last-out unitranche and second lien debt, unsecured debt, including mezzanine debt and, to a lesser extent, investments in equities. The fund primarily invests in United States. It seeks to invest between $10 million and $75 million in companies with EBITDA between $5 million and $75 million annually.