Contrasting Golub Capital BDC (NASDAQ:GBDC) & SLR Investment (NASDAQ:SLRC)

SLR Investment (NASDAQ:SLRC) and Golub Capital BDC (NASDAQ:GBDC) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, dividends, analyst recommendations, institutional ownership, valuation, risk and earnings.

Earnings and Valuation

This table compares SLR Investment and Golub Capital BDC”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SLR Investment	$232.43 million	N/A	$95.76 million	$1.61	10.17
Golub Capital BDC	$724.68 million	5.43	$273.79 million	$1.13	13.08

Golub Capital BDC has higher revenue and earnings than SLR Investment. SLR Investment is trading at a lower price-to-earnings ratio than Golub Capital BDC, indicating that it is currently the more affordable of the two stocks.

Dividends

SLR Investment pays an annual dividend of $1.64 per share and has a dividend yield of 10.0%. Golub Capital BDC pays an annual dividend of $1.56 per share and has a dividend yield of 10.6%. SLR Investment pays out 101.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Golub Capital BDC pays out 138.1% 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 for SLR Investment and Golub Capital BDC, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SLR Investment	2	2	2	1	2.29
Golub Capital BDC	0	1	3	0	2.75

SLR Investment currently has a consensus target price of $15.96, suggesting a potential downside of 2.48%. Golub Capital BDC has a consensus target price of $15.50, suggesting a potential upside of 4.91%. Given Golub Capital BDC’s stronger consensus rating and higher possible upside, analysts plainly believe Golub Capital BDC is more favorable than SLR Investment.

Risk & Volatility

SLR Investment has a beta of 0.73, indicating that its share price is 27% less volatile than the S&P 500. Comparatively, Golub Capital BDC has a beta of 0.51, indicating that its share price is 49% less volatile than the S&P 500.

Institutional and Insider Ownership

35.3% of SLR Investment shares are owned by institutional investors. Comparatively, 42.4% of Golub Capital BDC shares are owned by institutional investors. 8.6% of SLR Investment shares are owned by insiders. Comparatively, 3.6% of Golub Capital BDC shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares SLR Investment and Golub Capital BDC’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SLR Investment	38.60%	9.53%	3.84%
Golub Capital BDC	35.50%	10.59%	4.86%

Summary

Golub Capital BDC beats SLR Investment on 10 of the 16 factors compared between the two stocks.

About SLR Investment

SLR Investment Corp. is a business development company specializing in secured debt (first lien unitranche and second lien), subordinated (unsecured) debt, minority equity, leveraged buyouts, acquisitions, recapitalizations, general refinancing, growth capital and strategic income-oriented control equity investments in leveraged middle market companies. The fund invests in aerospace and defense; air freight & logistics; asset management; automotive; banking; beverage, food and tobacco; building products; buildings and real estate; broadcasting and entertainment; cargo transport; commercial services and supplies; communications equipment; chemicals, plastics and rubber; containers, packaging and glass; construction & engineering; diversified/conglomerate manufacturing; consumer Finance; distributors; diversified/conglomerate services; diversified financial services; diversified real estate activities; food products; Footwear; Education Services; diversified telecommunications services; electronics; farming and agriculture; finance; grocery; health care equipment and supplies; health care facilities; education and childcare; home and office furnishing, durable consumer products; hotels, motels, inns and gaming; insurance; restaurants, leisure, amusement, and entertainment; leisure equipment tolls and services, media, multiline retail, multi sector holdings; paper and forest products; personal products; professional services, research and consulting services, software; specialty retail; textiles apparel and luxury goods, thrifts and mortgage finance, trading companies and distributors, utilities, and wireless telecommunication services; industrial conglomerates; internet software and services, IT services, machinery; mining, steel, iron, and non-precious metals; oil and gas; personal, food and miscellaneous services; printing and publishing; retail stores; telecommunications; textiles and leather; and utilities. It also invests in life sciences with focus on specialty pharmaceuticals, medical devices, biotech, health Care Providers and services; health Care technology, enabling technologies and tools. The fund primarily invests in United States. The fund’s investments generally range between $5 million and $100 million. The fund invests in companies with revenues between $50 million and $1 billion and EBITDA between $15 million and $100 million. It invests in the form of senior secured loans, mezzanine loans, and equity securities. It may also seek investments in thinly traded public companies and also make secondary investments. The fund makes non-control equity investments. It primarily exits within three years of the initial capital commitment.

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.