Contrasting Chicago Atlantic BDC (NASDAQ:LIEN) & Golub Capital BDC (NASDAQ:GBDC)

Chicago Atlantic BDC (NASDAQ:LIEN) and Golub Capital BDC (NASDAQ:GBDC) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their dividends, institutional ownership, risk, earnings, profitability, analyst recommendations and valuation.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Chicago Atlantic BDC	33.72%	5.80%	5.46%
Golub Capital BDC	43.25%	10.40%	4.61%

Institutional and Insider Ownership

4.4% of Chicago Atlantic BDC shares are owned by institutional investors. Comparatively, 42.4% of Golub Capital BDC shares are owned by institutional investors. 16.9% of Chicago Atlantic BDC shares are owned by company insiders. Comparatively, 3.6% of Golub Capital BDC shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Dividends

Chicago Atlantic BDC pays an annual dividend of $1.36 per share and has a dividend yield of 12.8%. Golub Capital BDC pays an annual dividend of $1.56 per share and has a dividend yield of 11.5%. Chicago Atlantic BDC pays out 172.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. 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.

Valuation and Earnings

This table compares Chicago Atlantic BDC and Golub Capital BDC”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Chicago Atlantic BDC	$21.67 million	11.20	$9.62 million	$0.79	13.47
Golub Capital BDC	$870.78 million	4.09	$273.79 million	$1.42	9.53

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

Volatility and Risk

Chicago Atlantic BDC has a beta of 0.27, meaning that its stock price is 73% less volatile than the S&P 500. Comparatively, Golub Capital BDC has a beta of 0.47, meaning that its stock price is 53% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Chicago Atlantic BDC and Golub Capital BDC, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Chicago Atlantic BDC	0	3	0	0	2.00
Golub Capital BDC	0	2	2	0	2.50

Golub Capital BDC has a consensus target price of $15.00, indicating a potential upside of 10.86%. Given Golub Capital BDC’s stronger consensus rating and higher possible upside, analysts clearly believe Golub Capital BDC is more favorable than Chicago Atlantic BDC.

Summary

Golub Capital BDC beats Chicago Atlantic BDC on 11 of the 16 factors compared between the two stocks.

About Chicago Atlantic BDC

Chicago Atlantic BDC Inc. is a specialty finance company which has elected to be regulated as a business development company. Its investment objective is to maximize risk-adjusted returns on equity for its stockholders by investing primarily in direct loans to privately held middle-market companies, with a primary focus on cannabis companies. Chicago Atlantic BDC Inc., formerly known as CHICAGO ATLNTIC, is based in NEW YORK.

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.