Head to Head Analysis: Monroe Capital Corporation (MRCC) vs. TCG BDC INC (CGBD)

TCG BDC INC (NASDAQ: CGBD) and Monroe Capital Corporation (NASDAQ:MRCC) are both small-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, analyst recommendations, valuation, institutional ownership, earnings, profitability and risk.

Dividends

TCG BDC INC pays an annual dividend of $1.48 per share and has a dividend yield of 8.1%. Monroe Capital Corporation pays an annual dividend of $1.40 per share and has a dividend yield of 10.1%. Monroe Capital Corporation pays out 157.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares TCG BDC INC and Monroe Capital Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
TCG BDC INC N/A N/A N/A
Monroe Capital Corporation 31.60% 9.39% 5.49%

Institutional and Insider Ownership

2.3% of TCG BDC INC shares are held by institutional investors. Comparatively, 26.7% of Monroe Capital Corporation shares are held by institutional investors. 0.1% of TCG BDC INC shares are held by insiders. Comparatively, 1.9% of Monroe Capital Corporation shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares TCG BDC INC and Monroe Capital Corporation’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
TCG BDC INC N/A N/A N/A N/A N/A
Monroe Capital Corporation N/A N/A N/A $0.89 15.61

Analyst Ratings

This is a breakdown of current ratings and price targets for TCG BDC INC and Monroe Capital Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TCG BDC INC 0 0 4 0 3.00
Monroe Capital Corporation 0 1 4 0 2.80

TCG BDC INC presently has a consensus price target of $19.13, suggesting a potential upside of 4.51%. Monroe Capital Corporation has a consensus price target of $16.50, suggesting a potential upside of 18.79%. Given Monroe Capital Corporation’s higher possible upside, analysts clearly believe Monroe Capital Corporation is more favorable than TCG BDC INC.

Summary

Monroe Capital Corporation beats TCG BDC INC on 7 of the 9 factors compared between the two stocks.

About TCG BDC INC

TCG BDC, Inc., formerly Carlyle GMS Finance, Inc., is a managed and non-diversified closed-end investment company. The Company is focused on lending to middle market companies. The Company’s investment objective is to generate current income and capital appreciation primarily through debt investments in the United States and middle market companies. The Company seeks to achieve its investment objective primarily through direct originations of secured debt, including first lien senior secured loans and second lien senior secured loans. The Company’s first lien senior secured loans include stand-alone first lien loans, first lien/last out loans, and unitranche loans. Second lien senior secured loans (Middle Market Senior Loans), with the balance of its assets invested yielding in higher investments include unsecured debt, mezzanine debt and investments in equities. The Company’s investment adviser is Carlyle GMS Investment Management L.L.C.

About Monroe Capital Corporation

Monroe Capital Corporation is a closed-end, non-diversified management investment company. The Company is a specialty finance company focused on providing financing primarily to lower middle-market companies in the United States and Canada. The Company’s investment objective is to maximize the total return to its stockholders in the form of current income and capital appreciation primarily through investments in senior, unitranche and junior secured debt, and unsecured subordinated debt and equity. The Company provides customized financing solutions focused primarily on senior secured, junior secured and unitranche (a combination of senior secured and junior secured debt in the same facility) debt, and subordinated debt and equity, including equity co-investments in preferred and common stock and warrants. The Company’s investment activities are managed by its investment advisor, Monroe Capital BDC Advisors, LLC (MC Advisors).

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