SLR Investment (NASDAQ:SLRC – Get Free Report) and Bain Capital Specialty Finance (NYSE:BCSF – Get Free Report) are both small-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, institutional ownership, dividends, profitability, analyst recommendations, earnings and valuation.
Valuation and Earnings
This table compares SLR Investment and Bain Capital Specialty Finance”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| SLR Investment | $218.54 million | 3.09 | $92.54 million | $1.64 | 7.54 |
| Bain Capital Specialty Finance | $88.67 million | 9.25 | $98.76 million | $1.14 | 11.09 |
Profitability
This table compares SLR Investment and Bain Capital Specialty Finance’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| SLR Investment | 41.81% | 8.33% | 3.25% |
| Bain Capital Specialty Finance | 27.00% | 10.44% | 4.35% |
Volatility & Risk
SLR Investment has a beta of 0.64, suggesting that its stock price is 36% less volatile than the S&P 500. Comparatively, Bain Capital Specialty Finance has a beta of 0.58, suggesting that its stock price is 42% less volatile than the S&P 500.
Analyst Recommendations
This is a breakdown of current ratings for SLR Investment and Bain Capital Specialty Finance, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| SLR Investment | 3 | 2 | 2 | 0 | 1.86 |
| Bain Capital Specialty Finance | 0 | 2 | 1 | 0 | 2.33 |
SLR Investment presently has a consensus target price of $14.10, indicating a potential upside of 14.08%. Bain Capital Specialty Finance has a consensus target price of $14.00, indicating a potential upside of 10.72%. Given SLR Investment’s higher possible upside, equities research analysts plainly believe SLR Investment is more favorable than Bain Capital Specialty Finance.
Institutional & Insider Ownership
35.3% of SLR Investment shares are held by institutional investors. 8.8% of SLR Investment shares are held by company insiders. Comparatively, 0.6% of Bain Capital Specialty Finance shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Dividends
SLR Investment pays an annual dividend of $1.24 per share and has a dividend yield of 10.0%. Bain Capital Specialty Finance pays an annual dividend of $1.68 per share and has a dividend yield of 13.3%. SLR Investment pays out 75.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Bain Capital Specialty Finance pays out 147.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Bain Capital Specialty Finance has raised its dividend for 4 consecutive years. Bain Capital Specialty Finance is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Summary
SLR Investment beats Bain Capital Specialty Finance on 9 of the 17 factors compared between the two stocks.
About SLR Investment
SLR Investment Corp. is a business development company specializing in secured debt (first lien unitranche and second lien), subordinated (unsecured) debt, minority equity, leveraged buyouts, acquisitions, recapitalizations, general refinancing, growth capital and strategic income-oriented control equity investments in leveraged middle market companies. The fund invests in aerospace and defense; air freight & logistics; asset management; automotive; banking; beverage, food and tobacco; building products; buildings and real estate; broadcasting and entertainment; cargo transport; commercial services and supplies; communications equipment; chemicals, plastics and rubber; containers, packaging and glass; construction & engineering; diversified/conglomerate manufacturing; consumer Finance; distributors; diversified/conglomerate services; diversified financial services; diversified real estate activities; food products; Footwear; Education Services; diversified telecommunications services; electronics; farming and agriculture; finance; grocery; health care equipment and supplies; health care facilities; education and childcare; home and office furnishing, durable consumer products; hotels, motels, inns and gaming; insurance; restaurants, leisure, amusement, and entertainment; leisure equipment tolls and services, media, multiline retail, multi sector holdings; paper and forest products; personal products; professional services, research and consulting services, software; specialty retail; textiles apparel and luxury goods, thrifts and mortgage finance, trading companies and distributors, utilities, and wireless telecommunication services; industrial conglomerates; internet software and services, IT services, machinery; mining, steel, iron, and non-precious metals; oil and gas; personal, food and miscellaneous services; printing and publishing; retail stores; telecommunications; textiles and leather; and utilities. It also invests in life sciences with focus on specialty pharmaceuticals, medical devices, biotech, health Care Providers and services; health Care technology, enabling technologies and tools. The fund primarily invests in United States. The fund’s investments generally range between $5 million and $100 million. The fund invests in companies with revenues between $50 million and $1 billion and EBITDA between $15 million and $100 million. It invests in the form of senior secured loans, mezzanine loans, and equity securities. It may also seek investments in thinly traded public companies and also make secondary investments. The fund makes non-control equity investments. It primarily exits within three years of the initial capital commitment.
About Bain Capital Specialty Finance
Bain Capital Specialty Finance, Inc. is business development company specializing in direct loans to middle-market companies. The fund seeks to invest in senior investments with a first or second lien on collateral, senior first lien, stretch senior, senior second lien, unitranche, mezzanine debt, junior securities, other junior investments, and secondary purchases of assets or portfolios that primarily consist of middle-market corporate debt. It typically invests in companies with EBITDA between $10 million and $150 million.
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