Financial Analysis: Kayne Anderson BDC (NYSE:KBDC) versus Nuveen Churchill Direct Lending (NYSE:NCDL)

Nuveen Churchill Direct Lending (NYSE:NCDL) and Kayne Anderson BDC (NYSE:KBDC) are both small-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, dividends, analyst recommendations, profitability, risk, institutional ownership and valuation.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Nuveen Churchill Direct Lending and Kayne Anderson BDC, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nuveen Churchill Direct Lending	1	3	1	0	2.00
Kayne Anderson BDC	0	1	3	0	2.75

Nuveen Churchill Direct Lending currently has a consensus target price of $15.75, indicating a potential upside of 8.94%. Kayne Anderson BDC has a consensus target price of $15.75, indicating a potential upside of 7.24%. Given Nuveen Churchill Direct Lending’s higher probable upside, equities research analysts plainly believe Nuveen Churchill Direct Lending is more favorable than Kayne Anderson BDC.

Valuation and Earnings

This table compares Nuveen Churchill Direct Lending and Kayne Anderson BDC”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nuveen Churchill Direct Lending	$224.04 million	3.19	$116.32 million	$1.53	9.45
Kayne Anderson BDC	$213.11 million	4.71	$131.94 million	$1.51	9.73

Kayne Anderson BDC has lower revenue, but higher earnings than Nuveen Churchill Direct Lending. Nuveen Churchill Direct Lending is trading at a lower price-to-earnings ratio than Kayne Anderson BDC, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Nuveen Churchill Direct Lending has a beta of 0.38, indicating that its share price is 62% less volatile than the S&P 500. Comparatively, Kayne Anderson BDC has a beta of 0.18, indicating that its share price is 82% less volatile than the S&P 500.

Dividends

Nuveen Churchill Direct Lending pays an annual dividend of $1.80 per share and has a dividend yield of 12.5%. Kayne Anderson BDC pays an annual dividend of $1.60 per share and has a dividend yield of 10.9%. Nuveen Churchill Direct Lending pays out 117.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Kayne Anderson BDC pays out 106.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares Nuveen Churchill Direct Lending and Kayne Anderson BDC’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Nuveen Churchill Direct Lending	36.83%	11.13%	4.83%
Kayne Anderson BDC	46.55%	10.40%	5.44%

Summary

Kayne Anderson BDC beats Nuveen Churchill Direct Lending on 8 of the 14 factors compared between the two stocks.

About Nuveen Churchill Direct Lending

Nuveen Churchill Direct Lending Corp. is a specialty finance company focused primarily on investing in senior secured loans to private equity-owned U.S. middle market companies. It has elected to be regulated as a business development company. Nuveen Churchill Direct Lending Corp. is based in NEW YORK.

About Kayne Anderson BDC

Kayne Anderson BDC Inc. is a business development company which invests primarily in first lien senior secured loans, with a secondary focus on unitranche and split-lien loans to middle market companies. Kayne Anderson BDC Inc. is based in CHICAGO.