Goldman Sachs BDC (NYSE:GSBD – Get Free Report) and Fidus Investment (NASDAQ:FDUS – Get Free Report) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, dividends, valuation, analyst recommendations, institutional ownership, profitability and earnings.
Earnings and Valuation
This table compares Goldman Sachs BDC and Fidus Investment”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Goldman Sachs BDC | $365.57 million | 2.74 | $119.27 million | $0.65 | 13.71 |
| Fidus Investment | $155.87 million | 4.62 | $82.40 million | $2.28 | 8.32 |
Profitability
This table compares Goldman Sachs BDC and Fidus Investment’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Goldman Sachs BDC | 21.32% | 10.94% | 4.66% |
| Fidus Investment | 49.51% | 11.19% | 5.97% |
Volatility & Risk
Goldman Sachs BDC has a beta of 0.62, meaning that its stock price is 38% less volatile than the S&P 500. Comparatively, Fidus Investment has a beta of 0.69, meaning that its stock price is 31% less volatile than the S&P 500.
Analyst Ratings
This is a breakdown of current recommendations for Goldman Sachs BDC and Fidus Investment, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Goldman Sachs BDC | 2 | 4 | 0 | 0 | 1.67 |
| Fidus Investment | 0 | 2 | 1 | 1 | 2.75 |
Goldman Sachs BDC presently has a consensus target price of $9.17, indicating a potential upside of 2.87%. Fidus Investment has a consensus target price of $21.00, indicating a potential upside of 10.76%. Given Fidus Investment’s stronger consensus rating and higher probable upside, analysts plainly believe Fidus Investment is more favorable than Goldman Sachs BDC.
Insider & Institutional Ownership
28.7% of Goldman Sachs BDC shares are held by institutional investors. Comparatively, 28.1% of Fidus Investment shares are held by institutional investors. 0.1% of Goldman Sachs BDC shares are held by insiders. Comparatively, 0.9% of Fidus Investment shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Dividends
Goldman Sachs BDC pays an annual dividend of $1.28 per share and has a dividend yield of 14.4%. Fidus Investment pays an annual dividend of $1.72 per share and has a dividend yield of 9.1%. Goldman Sachs BDC pays out 196.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Fidus Investment pays out 75.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Summary
Fidus Investment beats Goldman Sachs BDC on 12 of the 17 factors compared between the two stocks.
About Goldman Sachs BDC
Goldman Sachs BDC, Inc. is a business development company specializing in middle market and mezzanine investment in private companies. It seeks to make capital appreciation through direct originations of secured debt, senior secured debt, junior secured debt, including first lien, first lien/last-out unitranche and second lien debt, unsecured debt, including mezzanine debt and, to a lesser extent, investments in equities. The fund primarily invests in United States. It seeks to invest between $10 million and $75 million in companies with EBITDA between $5 million and $75 million annually.
About Fidus Investment
Fidus Investment Corporation is a business development company. It specializing in leveraged buyouts, refinancings, change of ownership transactions, recapitalizations, strategic acquisitions, mezzanine, growth capital, business expansion, lower middle market investments, debt investments, subordinated and second lien loans, senior secured and unitranche debt, preferred equity, warrants, subordinated debt, senior subordinated notes, junior secured loans, and unitranche loans. It does not invest in turnarounds or distressed situations. The fund prefers to invest in aerospace and defense, business services, consumer products and services including retail, food, and beverage, healthcare products and services, industrial products and services, information technology services, niche manufacturing, transportation and logistics, and value-added distribution sectors. It seeks to invest in companies based in United States. The fund typically invests between $5 million and $15 million per transaction in companies with annual revenues between $10 million and $150 million and an annual EBITDA between $3 million and $20 million, but it can occasionally invest in larger or smaller companies. It seeks to acquire minority equity stakes and board observation rights in conjunction with its investments.
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