MCG Capital (MCGC) and Blackrock Capital Investment (BKCC) Critical Comparison

MCG Capital (NASDAQ: MCGC) and Blackrock Capital Investment (NASDAQ:BKCC) are both financials companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, profitability, institutional ownership, dividends, earnings, analyst recommendations and valuation.

Institutional and Insider Ownership

30.9% of Blackrock Capital Investment shares are owned by institutional investors. 1.3% of Blackrock Capital Investment shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Dividends

Blackrock Capital Investment pays an annual dividend of $0.72 per share and has a dividend yield of 12.8%. MCG Capital does not pay a dividend. Blackrock Capital Investment pays out 300.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Valuation and Earnings

This table compares MCG Capital and Blackrock Capital Investment’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
MCG Capital N/A N/A N/A $0.11 N/A
Blackrock Capital Investment $117.44 million 3.50 -$84.29 million $0.24 23.38

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

Analyst Recommendations

This is a summary of current ratings and recommmendations for MCG Capital and Blackrock Capital Investment, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
MCG Capital 0 0 0 0 N/A
Blackrock Capital Investment 0 1 1 0 2.50

Blackrock Capital Investment has a consensus price target of $7.25, suggesting a potential upside of 29.23%.

Profitability

This table compares MCG Capital and Blackrock Capital Investment’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
MCG Capital -9.19% -0.34% -0.33%
Blackrock Capital Investment 19.87% 9.67% 6.19%

Summary

Blackrock Capital Investment beats MCG Capital on 9 of the 10 factors compared between the two stocks.

MCG Capital Company Profile

PFLT Funding II, LLC, formerly MCG Capital Corporation, is a United States-based company. The Company provides products and services.

Blackrock Capital Investment Company Profile

BlackRock Capital Investment Corporation is an externally-managed, non-diversified, closed-end management investment company. The Company’s investment objective is to generate both current income and capital appreciation through its debt and equity investments. The Company provides middle-market companies with a range of financing solutions, including senior and junior secured, unsecured and subordinated debt securities and loans, and equity securities. Its targeted investment typically ranges between $10 million and $50 million. The Company generally seeks to invest in companies that operate in a range of industries. The Company’s investments are in senior and junior secured, unsecured and subordinated loans to the United States private and certain public middle-market companies. The Company’s investment advisor is BlackRock Advisors, LLC.

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