Head to Head Review: Goldman Sachs BDC (GSBD) vs. Safeguard Scientifics (SFE)
Goldman Sachs BDC (NYSE: GSBD) and Safeguard Scientifics (NYSE:SFE) are both small-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their dividends, analyst recommendations, risk, profitability, institutional ownership, valuation and earnings.
Volatility & Risk
Goldman Sachs BDC has a beta of 0.87, meaning that its share price is 13% less volatile than the S&P 500. Comparatively, Safeguard Scientifics has a beta of 1.32, meaning that its share price is 32% more volatile than the S&P 500.
This is a breakdown of current recommendations for Goldman Sachs BDC and Safeguard Scientifics, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Goldman Sachs BDC||1||4||3||0||2.25|
Goldman Sachs BDC presently has a consensus price target of $22.18, suggesting a potential downside of 1.33%. Given Goldman Sachs BDC’s higher probable upside, research analysts clearly believe Goldman Sachs BDC is more favorable than Safeguard Scientifics.
Goldman Sachs BDC pays an annual dividend of $1.80 per share and has a dividend yield of 8.0%. Safeguard Scientifics does not pay a dividend. Goldman Sachs BDC pays out 139.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
This table compares Goldman Sachs BDC and Safeguard Scientifics’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Goldman Sachs BDC||35.73%||11.54%||6.67%|
Insider & Institutional Ownership
36.7% of Goldman Sachs BDC shares are held by institutional investors. Comparatively, 77.6% of Safeguard Scientifics shares are held by institutional investors. 0.3% of Goldman Sachs BDC shares are held by company insiders. Comparatively, 2.7% of Safeguard Scientifics shares are held 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.
Valuation & Earnings
This table compares Goldman Sachs BDC and Safeguard Scientifics’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Goldman Sachs BDC||N/A||N/A||N/A||$1.29||17.43|
|Safeguard Scientifics||N/A||N/A||-$17.72 million||($4.76)||-2.82|
Safeguard Scientifics is trading at a lower price-to-earnings ratio than Goldman Sachs BDC, indicating that it is currently the more affordable of the two stocks.
Goldman Sachs BDC beats Safeguard Scientifics on 7 of the 11 factors compared between the two stocks.
Goldman Sachs BDC Company Profile
Goldman Sachs BDC, Inc. is a closed-end management investment company. The Company is a specialty finance company, which is focused on lending to middle-market companies. The Company’s investment objective is to generate current income and, to a lesser extent, capital appreciation primarily through direct originations of secured debt, including first lien, including first lien, unitranche, including last out portions of such loans, and second lien debt, and unsecured debt, including mezzanine debt, as well as through select equity investments. The Company invests primarily in the United States middle-market companies. The Company invests in illiquid securities, including debt and equity investments, of middle-market companies. As of December 31, 2016, its portfolio included first lien/senior secured debt, first lien/last-out unitranche, second lien/senior secured debt, unsecured debt, preferred stock, common stock, and investment funds and vehicles.
Safeguard Scientifics Company Profile
Safeguard Scientifics, Inc. is engaged in providing capital to technology companies within the fields of healthcare, financial services and digital media. The Company holds interest in companies, which it refers to as partner companies. As of December 31, 2016, the Company held interests in 29 non-consolidated partner companies. The Company offers operational and management support to each of its partner companies. In addition to management and operational support, the Company offers ongoing planning and development assessment. It provides mentoring, advice and guidance to develop partner company management. The Company serves on the boards of directors of its partner companies, working with them to develop and implement strategic and operating plans. It measures and monitors achievement of these plans through regular review of operational and financial performance measurements.
Receive News & Stock Ratings for Goldman Sachs BDC Inc. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Goldman Sachs BDC Inc. and related stocks with our FREE daily email newsletter.