Gladstone Capital (GLAD) and Ishares Nasdaq Biotechnology (IBB) Head to Head Analysis

Gladstone Capital (NASDAQ: GLAD) and Ishares Nasdaq Biotechnology (NASDAQ:IBB) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their dividends, valuation, profitability, earnings, institutional ownership, analyst recommendations and risk.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Gladstone Capital and Ishares Nasdaq Biotechnology, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Gladstone Capital 0 2 1 0 2.33
Ishares Nasdaq Biotechnology 0 0 0 0 N/A

Gladstone Capital currently has a consensus target price of $8.70, indicating a potential downside of 4.29%. Given Gladstone Capital’s higher possible upside, equities research analysts clearly believe Gladstone Capital is more favorable than Ishares Nasdaq Biotechnology.

Dividends

Gladstone Capital pays an annual dividend of $0.84 per share and has a dividend yield of 9.2%. Ishares Nasdaq Biotechnology pays an annual dividend of $0.22 per share and has a dividend yield of 0.2%. Gladstone Capital pays out 100.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Insider & Institutional Ownership

12.3% of Gladstone Capital shares are owned by institutional investors. Comparatively, 58.3% of Ishares Nasdaq Biotechnology shares are owned by institutional investors. 5.9% of Gladstone Capital shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

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

Net Margins Return on Equity Return on Assets
Gladstone Capital 66.28% 9.87% 5.70%
Ishares Nasdaq Biotechnology N/A N/A N/A

Volatility & Risk

Gladstone Capital has a beta of 1.09, indicating that its share price is 9% more volatile than the S&P 500. Comparatively, Ishares Nasdaq Biotechnology has a beta of 1.34, indicating that its share price is 34% more volatile than the S&P 500.

Valuation and Earnings

This table compares Gladstone Capital and Ishares Nasdaq Biotechnology’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Gladstone Capital $39.23 million 6.23 $17.18 million $0.84 10.82
Ishares Nasdaq Biotechnology N/A N/A N/A N/A N/A

Gladstone Capital has higher revenue and earnings than Ishares Nasdaq Biotechnology.

Summary

Gladstone Capital beats Ishares Nasdaq Biotechnology on 8 of the 11 factors compared between the two stocks.

Gladstone Capital Company Profile

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.

Ishares Nasdaq Biotechnology Company Profile

iShares Nasdaq Biotechnology ETF (the Fund), formerly iShares Nasdaq Biotechnology Index Fund, is an exchange-traded fund (ETF). The Fund seeks investment results that correspond generally to the price and yield performance of the NASDAQ Biotechnology Index (the Index). The Index contains securities of NASDAQ listed companies that are classified according to the Industry Classification Benchmark as either biotechnology or pharmaceuticals, which also meet other eligibility criteria determined by NASDAQ. The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. The Fund’s investment advisor is BlackRock Fund Advisors, which is indirectly owned by BlackRock, Inc.

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