Contrasting Bain Capital Specialty Finance (NYSE:BCSF) and Northern Star Investment Corp. III (NYSE:NSTC)

Bain Capital Specialty Finance (NYSE:BCSF) and Northern Star Investment Corp. III (NYSE:NSTC) are both small-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, dividends, analyst recommendations, earnings, risk, valuation and institutional ownership.

Analyst Recommendations

This is a summary of recent recommendations for Bain Capital Specialty Finance and Northern Star Investment Corp. III, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bain Capital Specialty Finance	0	1	1	0	2.50
Northern Star Investment Corp. III	0	0	0	0	0.00

Bain Capital Specialty Finance currently has a consensus price target of $16.50, suggesting a potential upside of 3.77%. Given Bain Capital Specialty Finance’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Bain Capital Specialty Finance is more favorable than Northern Star Investment Corp. III.

Insider & Institutional Ownership

3.1% of Northern Star Investment Corp. III shares are held by institutional investors. 0.6% of Bain Capital Specialty Finance shares are held by company insiders. Comparatively, 81.4% of Northern Star Investment Corp. III shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Bain Capital Specialty Finance and Northern Star Investment Corp. III’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bain Capital Specialty Finance	43.62%	11.90%	5.43%
Northern Star Investment Corp. III	N/A	N/A	N/A

Risk & Volatility

Bain Capital Specialty Finance has a beta of 0.82, suggesting that its share price is 18% less volatile than the S&P 500. Comparatively, Northern Star Investment Corp. III has a beta of 0.45, suggesting that its share price is 55% less volatile than the S&P 500.

Earnings and Valuation

This table compares Bain Capital Specialty Finance and Northern Star Investment Corp. III”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bain Capital Specialty Finance	$131.73 million	7.83	$123.38 million	$1.74	9.14
Northern Star Investment Corp. III	N/A	N/A	$16.76 million	N/A	N/A

Bain Capital Specialty Finance has higher revenue and earnings than Northern Star Investment Corp. III.

Summary

Bain Capital Specialty Finance beats Northern Star Investment Corp. III on 9 of the 11 factors compared between the two stocks.

About Bain Capital Specialty Finance

Bain Capital Specialty Finance, Inc. is business development company specializing in direct loans to middle-market companies. The fund seeks to invest in senior investments with a first or second lien on collateral, senior first lien, stretch senior, senior second lien, unitranche, mezzanine debt, junior securities, other junior investments, and secondary purchases of assets or portfolios that primarily consist of middle-market corporate debt. It typically invests in companies with EBITDA between $10 million and $150 million.

About Northern Star Investment Corp. III

Northern Star Investment Corp. III does not have significant operations. It focuses on effect a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or similar business combination with one or more businesses or entities. The company intends to identify business opportunities in the field of direct-to-consumer and digitally-disruptive e-commerce spaces. Northern Star Investment Corp. III was incorporated in 2020 and is based in New York, New York.