Analyzing GSV Capital (GSVC) and TPG Specialty Lending (NYSE:TSLX)

GSV Capital (NASDAQ: GSVC) and TPG Specialty Lending (NYSE:TSLX) are both small-cap financials companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, dividends, risk, profitability, valuation and earnings.

Risk and Volatility

GSV Capital has a beta of 0.89, indicating that its stock price is 11% less volatile than the S&P 500. Comparatively, TPG Specialty Lending has a beta of 0.67, indicating that its stock price is 33% less volatile than the S&P 500.

Institutional & Insider Ownership

31.6% of GSV Capital shares are owned by institutional investors. Comparatively, 63.1% of TPG Specialty Lending shares are owned by institutional investors. 0.7% of GSV Capital shares are owned by insiders. Comparatively, 4.8% of TPG Specialty Lending shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Valuation and Earnings

This table compares GSV Capital and TPG Specialty Lending’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
GSV Capital $740,000.00 182.66 -$74.99 million ($0.58) -10.93
TPG Specialty Lending $192.41 million 6.36 $107.33 million $1.96 10.37

TPG Specialty Lending has higher revenue and earnings than GSV Capital. GSV Capital is trading at a lower price-to-earnings ratio than TPG Specialty Lending, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current ratings and target prices for GSV Capital and TPG Specialty Lending, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
GSV Capital 0 1 0 0 2.00
TPG Specialty Lending 0 1 2 0 2.67

TPG Specialty Lending has a consensus target price of $21.33, indicating a potential upside of 4.99%. Given TPG Specialty Lending’s stronger consensus rating and higher possible upside, analysts plainly believe TPG Specialty Lending is more favorable than GSV Capital.

Profitability

This table compares GSV Capital and TPG Specialty Lending’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
GSV Capital -769.78% -6.73% -3.80%
TPG Specialty Lending 56.43% 12.63% 7.53%

Dividends

TPG Specialty Lending pays an annual dividend of $1.56 per share and has a dividend yield of 7.7%. GSV Capital does not pay a dividend. 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.

Summary

TPG Specialty Lending beats GSV Capital on 12 of the 15 factors compared between the two stocks.

GSV Capital Company Profile

GSV Capital Corp. (GSV Capital) is an externally managed, non-diversified closed-end management investment company. The Company’s investment objective is to maximize its portfolio’s total return, principally by seeking capital gains on its equity and equity-related investments. The Company invests principally in the equity securities, which are venture-capital-backed emerging companies. The Company acquires its investments through direct investments with portfolio companies, secondary marketplaces for private companies and negotiations with selling stockholders. The Company may also invest in select publicly traded equity securities or certain non-United States companies that otherwise meet its investment criteria. It seeks to invest approximately 90% of its portfolio in late-stage companies and the remaining approximately 10% in emerging companies that fit within its targeted areas. Its investment activities are managed by its investment advisor, GSV Asset Management, LLC.

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.

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