Critical Contrast: Goldman Sachs BDC (NYSE:GSBD) and Tri-Continental (NYSE:TY)

Goldman Sachs BDC (NYSE:GSBDGet Rating) and Tri-Continental (NYSE:TYGet Rating) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, analyst recommendations, earnings, risk, profitability, valuation and institutional ownership.

Risk and Volatility

Goldman Sachs BDC has a beta of 1.19, indicating that its stock price is 19% more volatile than the S&P 500. Comparatively, Tri-Continental has a beta of 0.94, indicating that its stock price is 6% less volatile than the S&P 500.

Profitability

This table compares Goldman Sachs BDC and Tri-Continental’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Goldman Sachs BDC 26.97% 12.96% 5.68%
Tri-Continental N/A N/A N/A

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Goldman Sachs BDC and Tri-Continental, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Goldman Sachs BDC 0 4 0 0 2.00
Tri-Continental 0 0 0 0 N/A

Goldman Sachs BDC presently has a consensus target price of $16.25, suggesting a potential upside of 4.37%. Given Goldman Sachs BDC’s higher probable upside, equities analysts plainly believe Goldman Sachs BDC is more favorable than Tri-Continental.

Institutional & Insider Ownership

28.5% of Goldman Sachs BDC shares are held by institutional investors. Comparatively, 10.1% of Tri-Continental shares are held by institutional investors. 0.1% of Goldman Sachs BDC shares are held by company insiders. Comparatively, 8.7% of Tri-Continental shares are held by company 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.

Valuation and Earnings

This table compares Goldman Sachs BDC and Tri-Continental’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 $346.98 million 4.61 $192.43 million $0.88 17.69
Tri-Continental N/A N/A N/A N/A N/A

Goldman Sachs BDC has higher revenue and earnings than Tri-Continental.

Dividends

Goldman Sachs BDC pays an annual dividend of $1.80 per share and has a dividend yield of 11.6%. Tri-Continental pays an annual dividend of $4.96 per share and has a dividend yield of 18.0%. Goldman Sachs BDC pays out 204.5% 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

Goldman Sachs BDC beats Tri-Continental on 7 of the 10 factors compared between the two stocks.

About Goldman Sachs BDC

(Get Rating)

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 Tri-Continental

(Get Rating)

Tri-Continental Corporation is a closed ended equity mutual fund launched and managed by Columbia Management Investment Advisers, LLC. It primarily invests in the public equity markets of the United States. The fund invests in stocks of companies that operate across diversified sectors. It seeks to invest in stocks of large-cap companies. The fund benchmarks the performance of its portfolio against S&P 500 Index. Tri-Continental Corporation was formed in January 1929 and is domiciled in the United States.

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