MSC Income Fund (NYSE:MSIF – Get Free Report) and Golub Capital BDC (NASDAQ:GBDC – Get Free Report) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their profitability, analyst recommendations, dividends, institutional ownership, earnings, risk and valuation.
Analyst Recommendations
This is a breakdown of current ratings for MSC Income Fund and Golub Capital BDC, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| MSC Income Fund | 0 | 3 | 2 | 1 | 2.67 |
| Golub Capital BDC | 0 | 2 | 4 | 1 | 2.86 |
MSC Income Fund currently has a consensus target price of $13.88, indicating a potential upside of 10.43%. Golub Capital BDC has a consensus target price of $13.90, indicating a potential upside of 11.16%. Given Golub Capital BDC’s stronger consensus rating and higher possible upside, analysts clearly believe Golub Capital BDC is more favorable than MSC Income Fund.
Valuation and Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| MSC Income Fund | $110.26 million | 5.37 | -$155,544.55 | ($0.00) | -3,808.43 |
| Golub Capital BDC | $870.78 million | 3.73 | $376.65 million | $0.65 | 19.24 |
Golub Capital BDC has higher revenue and earnings than MSC Income Fund. MSC Income Fund is trading at a lower price-to-earnings ratio than Golub Capital BDC, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
42.4% of Golub Capital BDC shares are held by institutional investors. 1.4% of Golub Capital BDC shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Profitability
This table compares MSC Income Fund and Golub Capital BDC’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| MSC Income Fund | N/A | N/A | N/A |
| Golub Capital BDC | 21.45% | 9.91% | 4.39% |
Summary
Golub Capital BDC beats MSC Income Fund on 12 of the 13 factors compared between the two stocks.
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.
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