MSCI (NYSE:MSCI – 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 businesses based on the strength of their analyst recommendations, valuation, institutional ownership, risk, profitability, dividends and earnings.
Volatility and Risk
MSCI has a beta of 1.22, meaning that its share price is 22% more volatile than the S&P 500. Comparatively, Golub Capital BDC has a beta of 0.39, meaning that its share price is 61% less volatile than the S&P 500.
Earnings and Valuation
This table compares MSCI and Golub Capital BDC”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| MSCI | $3.13 billion | 12.53 | $1.20 billion | $18.28 | 29.56 |
| Golub Capital BDC | $870.78 million | 3.71 | $376.65 million | $0.65 | 19.15 |
MSCI has higher revenue and earnings than Golub Capital BDC. Golub Capital BDC is trading at a lower price-to-earnings ratio than MSCI, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a summary of recent ratings and recommmendations for MSCI and Golub Capital BDC, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| MSCI | 0 | 0 | 11 | 1 | 3.08 |
| Golub Capital BDC | 0 | 2 | 4 | 1 | 2.86 |
MSCI currently has a consensus target price of $709.50, suggesting a potential upside of 31.29%. Golub Capital BDC has a consensus target price of $13.90, suggesting a potential upside of 11.65%. Given MSCI’s stronger consensus rating and higher possible upside, analysts plainly believe MSCI is more favorable than Golub Capital BDC.
Dividends
MSCI pays an annual dividend of $8.20 per share and has a dividend yield of 1.5%. Golub Capital BDC pays an annual dividend of $1.32 per share and has a dividend yield of 10.6%. MSCI pays out 44.9% of its earnings in the form of a dividend. Golub Capital BDC pays out 203.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. MSCI has raised its dividend for 11 consecutive years.
Insider and Institutional Ownership
90.0% of MSCI shares are owned by institutional investors. Comparatively, 42.4% of Golub Capital BDC shares are owned by institutional investors. 3.8% of MSCI shares are owned by company insiders. Comparatively, 1.4% of Golub Capital BDC shares are owned 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.
Profitability
This table compares MSCI and Golub Capital BDC’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| MSCI | 40.74% | -55.19% | 24.90% |
| Golub Capital BDC | 21.45% | 9.91% | 4.39% |
Summary
MSCI beats Golub Capital BDC on 15 of the 17 factors compared between the two stocks.
About MSCI
MSCI Inc., together with its subsidiaries, provides critical decision support tools and solutions for the investment community to manage investment processes worldwide. The Index segment provides indexes for use in various areas of the investment process, including indexed financial product, such as ETFs, mutual funds, annuities, futures, options, structured products, and over-the-counter derivatives; performance benchmarking; portfolio construction and rebalancing; and asset allocation, as well as licenses GICS and GICS Direct. The Analytics segment offers risk management, performance attribution and portfolio management content, application, an integrated view of risk and return service, and an analysis of market, credit, liquidity, counterparty, and climate risk across asset classes; managed services, including consolidation of client portfolio data, review and reconciliation of input data and results, and customized reporting; and HedgePlatform to measure, evaluate, and monitor the risk of hedge fund investments. The ESG and Climate segment provides products and services that help institutional investors understand how ESG impacts the long-term risk and return of their portfolio and individual security-level investments; and data, ratings, research, and tools to help investors navigate increasing regulation. The All Other Private Assets segment includes real estate and infrastructure data, benchmarks, return-analytics, climate assessments and market insights; business intelligence to real estate owners, managers, developers, and brokers; and offers investment decision support tools for private capital. The Private Capital Solutions segment offers tools to help private asset investors across mission-critical workflows, such as sourcing terms and conditions, evaluating operating performance, managing risk and other activities supporting private capital investing. MSCI Inc. was incorporated in 1998 and is headquartered in New York, 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.
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