Blackrock Capital Investment (NASDAQ: BKCC) and Nelnet (NYSE:NNI) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, risk, dividends, profitability, institutional ownership and valuation.
Insider & Institutional Ownership
33.6% of Blackrock Capital Investment shares are owned by institutional investors. Comparatively, 41.4% of Nelnet shares are owned by institutional investors. 1.3% of Blackrock Capital Investment shares are owned by insiders. Comparatively, 46.1% of Nelnet shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Volatility and Risk
Blackrock Capital Investment has a beta of 0.78, suggesting that its share price is 22% less volatile than the S&P 500. Comparatively, Nelnet has a beta of 0.86, suggesting that its share price is 14% less volatile than the S&P 500.
Valuation & Earnings
This table compares Blackrock Capital Investment and Nelnet’s gross revenue, earnings per share (EPS) and valuation.
||Earnings Per Share
|Blackrock Capital Investment
Nelnet has higher revenue and earnings than Blackrock Capital Investment. Nelnet 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.
This table compares Blackrock Capital Investment and Nelnet’s net margins, return on equity and return on assets.
||Return on Equity
||Return on Assets
|Blackrock Capital Investment
This is a summary of recent ratings and recommmendations for Blackrock Capital Investment and Nelnet, as reported by MarketBeat.
||Strong Buy Ratings
|Blackrock Capital Investment
Blackrock Capital Investment currently has a consensus price target of $7.25, suggesting a potential upside of 21.64%. Nelnet has a consensus price target of $53.50, suggesting a potential upside of 2.20%. Given Blackrock Capital Investment’s higher possible upside, analysts plainly believe Blackrock Capital Investment is more favorable than Nelnet.
Blackrock Capital Investment pays an annual dividend of $0.72 per share and has a dividend yield of 12.1%. Nelnet pays an annual dividend of $0.64 per share and has a dividend yield of 1.2%. Blackrock Capital Investment pays out 257.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Nelnet pays out 15.5% of its earnings in the form of a dividend. Blackrock Capital Investment has increased its dividend for 2 consecutive years. Blackrock Capital Investment is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Blackrock Capital Investment beats Nelnet on 8 of the 15 factors compared between the two stocks.
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.
Nelnet Company Profile
Nelnet, Inc. provides education related products and services, and loan asset management services worldwide. The company's Loan Systems and Servicing segment is involved in loan servicing activities, such as loan conversion, application processing, borrower updates, customer service, payment processing, due diligence procedures, funds management reconciliation, and claim processing activities for student loan portfolio and third-party clients. This segment also provides software and data center, default aversion tracking, claim processing, and post-default collection services, as well as borrower and loan updates for guarantee agencies, and contact center solutions; and licenses student loan servicing software to third-party student loan holders and servicers. Its Tuition Payment Processing and Campus Commerce segment offers products and services to help students and families to manage the payment of education costs; school information system software; professional development and educational instruction services to K-12 schools; and education-focused technologies, services, and support solutions to schools for collecting and processing commerce data. It also provides electronic transfer and credit card processing, reporting, billing and invoicing, and integration services; and mobile and virtual terminal solutions for business software products. Its Communications segment provides Internet access, data connectivity, Internet protocol television video, video on demand, and high-definition television services; digital video recorders to residential and business subscribers; and local calling and long-distance telephone services. This segment offers its services through direct marketing, call and communication centers, and sales representatives; and its Website. Its Asset Generation and Management segment acquires, manages, and owns loan assets. It also provides investment advisory services. The company was founded in 1978 and is headquartered in Lincoln, Nebraska.
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