Financial Analysis: BNY Mellon Municipal Income (NYSE:DMF) vs. Goldman Sachs BDC (NYSE:GSBD)

Goldman Sachs BDC (NYSE:GSBD) and BNY Mellon Municipal Income (NYSE:DMF) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their valuation, dividends, risk, institutional ownership, analyst recommendations, earnings and profitability.

Dividends

Goldman Sachs BDC pays an annual dividend of $1.80 per share and has a dividend yield of 13.6%. BNY Mellon Municipal Income pays an annual dividend of $0.22 per share and has a dividend yield of 3.1%. Goldman Sachs BDC pays out 257.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Goldman Sachs BDC and BNY Mellon Municipal Income, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Goldman Sachs BDC	0	2	0	0	2.00
BNY Mellon Municipal Income	0	0	0	0	0.00

Goldman Sachs BDC presently has a consensus price target of $13.00, indicating a potential downside of 1.63%. Given Goldman Sachs BDC’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Goldman Sachs BDC is more favorable than BNY Mellon Municipal Income.

Valuation & Earnings

This table compares Goldman Sachs BDC and BNY Mellon Municipal Income”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Goldman Sachs BDC	$454.91 million	3.41	$195.87 million	$0.70	18.88
BNY Mellon Municipal Income	N/A	N/A	N/A	N/A	N/A

Goldman Sachs BDC has higher revenue and earnings than BNY Mellon Municipal Income.

Institutional and Insider Ownership

28.7% of Goldman Sachs BDC shares are held by institutional investors. 0.1% of Goldman Sachs BDC shares are held by insiders. Comparatively, 1.0% of BNY Mellon Municipal Income shares are held by 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 Goldman Sachs BDC and BNY Mellon Municipal Income’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Goldman Sachs BDC	17.01%	15.72%	7.08%
BNY Mellon Municipal Income	N/A	N/A	N/A

Volatility & Risk

Goldman Sachs BDC has a beta of 1.06, meaning that its share price is 6% more volatile than the S&P 500. Comparatively, BNY Mellon Municipal Income has a beta of 0.57, meaning that its share price is 43% less volatile than the S&P 500.

Summary

Goldman Sachs BDC beats BNY Mellon Municipal Income on 9 of the 11 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 BNY Mellon Municipal Income

BNY Mellon Municipal Income, Inc. is a closed ended fixed income mutual fund launched and managed by BNY Mellon Investment Adviser, Inc. It invests in the fixed income markets of the United States. The fund primarily invests in municipal obligations that are rated investment grade and have maturities of less than one year. It employs fundamental analysis to create its portfolio. The fund was formerly known as Dreyfus Municipal Income, Inc. BNY Mellon Municipal Income, Inc. was formed on October 24, 1988 and is domiciled in the United States.