Critical Survey: Nuveen Churchill Direct Lending (NYSE:NCDL) & Chicago Atlantic BDC (NASDAQ:LIEN)

Nuveen Churchill Direct Lending (NYSE:NCDL) and Chicago Atlantic BDC (NASDAQ:LIEN) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, risk, profitability, earnings, institutional ownership and dividends.

Volatility and Risk

Nuveen Churchill Direct Lending has a beta of 0.32, indicating that its stock price is 68% less volatile than the S&P 500. Comparatively, Chicago Atlantic BDC has a beta of 0.28, indicating that its stock price is 72% less volatile than the S&P 500.

Institutional and Insider Ownership

4.4% of Chicago Atlantic BDC shares are owned by institutional investors. 0.7% of Nuveen Churchill Direct Lending shares are owned by company insiders. Comparatively, 16.9% of Chicago Atlantic BDC shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and price targets for Nuveen Churchill Direct Lending and Chicago Atlantic BDC, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nuveen Churchill Direct Lending	0	4	2	0	2.33
Chicago Atlantic BDC	0	3	0	0	2.00

Nuveen Churchill Direct Lending currently has a consensus price target of $15.50, indicating a potential upside of 6.43%. Given Nuveen Churchill Direct Lending’s stronger consensus rating and higher probable upside, research analysts clearly believe Nuveen Churchill Direct Lending is more favorable than Chicago Atlantic BDC.

Profitability

This table compares Nuveen Churchill Direct Lending and Chicago Atlantic BDC’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Nuveen Churchill Direct Lending	31.57%	10.48%	4.47%
Chicago Atlantic BDC	33.24%	5.88%	5.41%

Dividends

Nuveen Churchill Direct Lending pays an annual dividend of $1.44 per share and has a dividend yield of 9.9%. Chicago Atlantic BDC pays an annual dividend of $1.36 per share and has a dividend yield of 14.3%. Nuveen Churchill Direct Lending 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. Chicago Atlantic BDC pays out 170.0% 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 Nuveen Churchill Direct Lending and Chicago Atlantic BDC”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nuveen Churchill Direct Lending	$207.86 million	3.46	$65.61 million	$1.31	11.12
Chicago Atlantic BDC	$54.30 million	3.98	$33.28 million	$0.80	11.85

Nuveen Churchill Direct Lending has higher revenue and earnings than Chicago Atlantic BDC. Nuveen Churchill Direct Lending 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.

Summary

Nuveen Churchill Direct Lending beats Chicago Atlantic BDC on 9 of the 16 factors compared between the two stocks.

About Nuveen Churchill Direct Lending

Nuveen Churchill Direct Lending Corp. is a specialty finance company focused primarily on investing in senior secured loans to private equity-owned U.S. middle market companies. It has elected to be regulated as a business development company. Nuveen Churchill Direct Lending Corp. is based in NEW YORK.

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.