Analyzing Gladstone Capital (GLAD) and GSV Capital (NASDAQ:GSVC)

Gladstone Capital (NASDAQ: GLAD) and GSV Capital (NASDAQ:GSVC) are both small-cap finance companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, valuation, earnings, profitability, dividends, analyst recommendations and institutional ownership.

Profitability

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

Net Margins Return on Equity Return on Assets
Gladstone Capital 58.48% 9.97% 5.95%
GSV Capital -769.78% -6.73% -3.80%

Analyst Recommendations

This is a summary of current recommendations and price targets for Gladstone Capital and GSV Capital, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Gladstone Capital 0 3 2 0 2.40
GSV Capital 0 1 0 0 2.00

Gladstone Capital currently has a consensus price target of $9.16, indicating a potential upside of 3.30%. Given Gladstone Capital’s stronger consensus rating and higher possible upside, research analysts plainly believe Gladstone Capital is more favorable than GSV Capital.

Insider and Institutional Ownership

14.3% of Gladstone Capital shares are held by institutional investors. Comparatively, 30.9% of GSV Capital shares are held by institutional investors. 5.9% of Gladstone Capital shares are held by company insiders. Comparatively, 0.7% of GSV Capital shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Risk and Volatility

Gladstone Capital has a beta of 1.11, meaning that its stock price is 11% more volatile than the S&P 500. Comparatively, GSV Capital has a beta of 1.54, meaning that its stock price is 54% more volatile than the S&P 500.

Dividends

Gladstone Capital pays an annual dividend of $0.84 per share and has a dividend yield of 9.5%. GSV Capital does not pay a dividend. Gladstone Capital pays out 93.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Earnings & Valuation

This table compares Gladstone Capital and GSV Capital’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Gladstone Capital $39.23 million 6.02 $17.18 million $0.90 9.86
GSV Capital $740,000.00 196.49 -$74.99 million ($0.59) -11.56

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

Summary

Gladstone Capital beats GSV Capital on 11 of the 15 factors compared between the two stocks.

About Gladstone Capital

Gladstone Capital Corporation is a closed-end, non-diversified management investment company, operating as a business development company (BDC). The objectives of the Company are to achieve and grow current income by investing in debt securities of established businesses that it believes will provide stable earnings and cash flow to pay expenses, make principal and interest payments on its outstanding indebtedness and make distributions to stockholders that grow over time, and to provide its stockholders with long-term capital appreciation in the value of its assets by investing in equity securities of established businesses that it believes can grow over time to permit it to sell its equity investments for capital gains. The Company is focused on investing in lower middle-market companies in the United States. It has investments in south, Midwest, west and northeast of the United States. Its portfolio allocation includes debt investments and equity investments.

About GSV Capital

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.

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