TPG Specialty Lending (NYSE: TSLX) and TriplePoint Venture Growth BDC (NYSE:TPVG) are both small-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, institutional ownership, risk, dividends, analyst recommendations, profitability and earnings.
Valuation and Earnings
This table compares TPG Specialty Lending and TriplePoint Venture Growth BDC’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|TPG Specialty Lending||$192.41 million||6.28||$107.33 million||$1.96||10.23|
|TriplePoint Venture Growth BDC||$43.63 million||5.30||$11.12 million||$1.41||9.26|
This table compares TPG Specialty Lending and TriplePoint Venture Growth BDC’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|TPG Specialty Lending||56.43%||12.63%||7.53%|
|TriplePoint Venture Growth BDC||43.72%||12.05%||5.99%|
TPG Specialty Lending pays an annual dividend of $1.56 per share and has a dividend yield of 7.8%. TriplePoint Venture Growth BDC pays an annual dividend of $1.44 per share and has a dividend yield of 11.0%. TPG Specialty Lending pays out 79.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. TriplePoint Venture Growth BDC pays out 102.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Insider & Institutional Ownership
62.9% of TPG Specialty Lending shares are owned by institutional investors. Comparatively, 33.8% of TriplePoint Venture Growth BDC shares are owned by institutional investors. 4.9% of TPG Specialty Lending shares are owned by company insiders. Comparatively, 1.3% of TriplePoint Venture Growth BDC shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
This is a summary of current recommendations for TPG Specialty Lending and TriplePoint Venture Growth BDC, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|TPG Specialty Lending||0||1||2||0||2.67|
|TriplePoint Venture Growth BDC||0||1||1||0||2.50|
TPG Specialty Lending presently has a consensus target price of $21.33, suggesting a potential upside of 6.35%. TriplePoint Venture Growth BDC has a consensus target price of $14.00, suggesting a potential upside of 7.28%. Given TriplePoint Venture Growth BDC’s higher probable upside, analysts clearly believe TriplePoint Venture Growth BDC is more favorable than TPG Specialty Lending.
Volatility & Risk
TPG Specialty Lending has a beta of 0.67, meaning that its share price is 33% less volatile than the S&P 500. Comparatively, TriplePoint Venture Growth BDC has a beta of 1.31, meaning that its share price is 31% more volatile than the S&P 500.
TPG Specialty Lending beats TriplePoint Venture Growth BDC on 13 of the 16 factors compared between the two stocks.
TPG Specialty Lending Company Profile
TPG Specialty Lending, Inc. is an externally managed, closed-end, non-diversified management investment company. The Company is a specialty finance company focused on lending to middle-market companies. It seeks to generate current income primarily in the United States-domiciled middle-market companies through direct originations of senior secured loans and originations of mezzanine and unsecured loans and investments in corporate bonds and equity securities. The Company invests in first-lien debt, second-lien debt, mezzanine and unsecured debt and equity and other investments. Its first-lien debt may include standalone first-lien loans; last out first-lien loans; unitranche loans and secured corporate bonds. Its second-lien debt may include secured loans and secured corporate bonds, with a secondary priority behind first-lien debt. As of December 31, 2016, the Company’s portfolio was invested across 19 different industries. The Company’s investment advisor is TSL Advisers, LLC.
TriplePoint Venture Growth BDC Company Profile
TriplePoint Venture Growth BDC Corp. is a closed-end, non-diversified management investment company. The Company’s investment objective is to maximize its total return to stockholders primarily in the form of current income and, to a lesser extent, capital appreciation by primarily lending with warrants to venture growth stage companies focused in technology, life sciences and other high growth industries, which are backed by TriplePoint Capital LLC’s (TPC) select group of venture capital investors. The Company targets investment opportunities in venture growth stage companies backed by venture capital investors. The Company originates and invests primarily in loans that have a secured collateral position and are used by venture growth stage companies to finance their continued expansion and growth, equipment financings and, on a select basis, revolving loans. The Company is managed by TPVG Advisers LLC.
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