Reviewing Moelis & Company (NYSE:MC) and Palmer Square Capital BDC (NYSE:PSBD)

Moelis & Company (NYSE:MC) and Palmer Square Capital BDC (NYSE:PSBD) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, earnings, institutional ownership, dividends, valuation, analyst recommendations and risk.

Profitability

This table compares Moelis & Company and Palmer Square Capital BDC’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Moelis & Company	14.50%	39.59%	17.04%
Palmer Square Capital BDC	-26.73%	11.22%	4.15%

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Moelis & Company and Palmer Square Capital BDC, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Moelis & Company	1	7	2	0	2.10
Palmer Square Capital BDC	0	5	0	0	2.00

Moelis & Company presently has a consensus target price of $73.62, indicating a potential upside of 23.43%. Palmer Square Capital BDC has a consensus target price of $10.50, indicating a potential upside of 1.65%. Given Moelis & Company’s stronger consensus rating and higher probable upside, analysts plainly believe Moelis & Company is more favorable than Palmer Square Capital BDC.

Volatility & Risk

Moelis & Company has a beta of 1.84, meaning that its stock price is 84% more volatile than the S&P 500. Comparatively, Palmer Square Capital BDC has a beta of 0.87, meaning that its stock price is 13% less volatile than the S&P 500.

Insider & Institutional Ownership

91.5% of Moelis & Company shares are owned by institutional investors. Comparatively, 6.5% of Palmer Square Capital BDC shares are owned by institutional investors. 6.3% of Moelis & Company shares are owned by company insiders. Comparatively, 1.1% of Palmer Square Capital BDC shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Moelis & Company and Palmer Square Capital BDC”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Moelis & Company	$1.52 billion	3.08	$233.04 million	$2.87	20.78
Palmer Square Capital BDC	$124.39 million	2.55	-$3.17 million	($0.99)	-10.43

Moelis & Company has higher revenue and earnings than Palmer Square Capital BDC. Palmer Square Capital BDC is trading at a lower price-to-earnings ratio than Moelis & Company, indicating that it is currently the more affordable of the two stocks.

Dividends

Moelis & Company pays an annual dividend of $2.60 per share and has a dividend yield of 4.4%. Palmer Square Capital BDC pays an annual dividend of $1.44 per share and has a dividend yield of 13.9%. Moelis & Company pays out 90.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Palmer Square Capital BDC pays out -145.5% of its earnings in the form of a dividend. Moelis & Company has raised its dividend for 1 consecutive years. Palmer Square Capital BDC is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Moelis & Company beats Palmer Square Capital BDC on 15 of the 17 factors compared between the two stocks.

About Moelis & Company

Moelis & Co. operates as a holding company. It engages in the provision of financial advisory, capital raising and asset management services to a client base including corporations, governments, sovereign wealth funds and financial sponsors. The firm focuses on clients including large public multinational corporations, middle market private companies, financial sponsors, entrepreneurs and governments. The company was founded by Kenneth David Moelis, Navid Mahmoodzadegan, Jeffrey Raich and Elizabeth Ann Crain in July 2007 and is headquartered in New York, NY.

About Palmer Square Capital BDC

Palmer Square Capital BDC Inc. is an externally managed, non-diversified closed-end management investment company which primarily lends to and invests in corporate debt securities, including small to large private U.S. companies and has elected to be regulated as a business development company. Palmer Square Capital BDC Inc. is based in MISSION WOODS, Kan.