Reviewing Carlyle Secured Lending (NASDAQ:CGBD) & Netcapital (NASDAQ:NCPL)

Carlyle Secured Lending (NASDAQ:CGBD) and Netcapital (NASDAQ:NCPL) are both small-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, profitability, dividends, valuation, risk, earnings and institutional ownership.

Profitability

This table compares Carlyle Secured Lending and Netcapital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Carlyle Secured Lending	14.26%	8.85%	3.90%
Netcapital	-3,806.77%	-40.53%	-32.59%

Valuation & Earnings

This table compares Carlyle Secured Lending and Netcapital”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Carlyle Secured Lending	$255.57 million	2.80	$69.97 million	$0.51	20.37
Netcapital	$870,000.00	19.58	-$28.30 million	($15.49)	-0.14

Carlyle Secured Lending has higher revenue and earnings than Netcapital. Netcapital is trading at a lower price-to-earnings ratio than Carlyle Secured Lending, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Carlyle Secured Lending and Netcapital, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Carlyle Secured Lending	0	4	1	1	2.50
Netcapital	1	0	0	0	1.00

Carlyle Secured Lending currently has a consensus target price of $11.33, suggesting a potential upside of 9.08%. Given Carlyle Secured Lending’s stronger consensus rating and higher possible upside, analysts plainly believe Carlyle Secured Lending is more favorable than Netcapital.

Institutional & Insider Ownership

24.5% of Carlyle Secured Lending shares are held by institutional investors. Comparatively, 30.7% of Netcapital shares are held by institutional investors. 0.3% of Carlyle Secured Lending shares are held by insiders. Comparatively, 4.9% of Netcapital shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Volatility & Risk

Carlyle Secured Lending has a beta of 0.66, meaning that its share price is 34% less volatile than the S&P 500. Comparatively, Netcapital has a beta of 2.35, meaning that its share price is 135% more volatile than the S&P 500.

Summary

Carlyle Secured Lending beats Netcapital on 10 of the 14 factors compared between the two stocks.

About Carlyle Secured Lending

Carlyle Secured Lending, Inc. is business development company specializing in first lien debt, senior secured loans, second lien senior secured loan unsecured debt, mezzanine debt and investments in equities. It specializes in directly investing. It specializes in middle market. It targets healthcare and pharmaceutical, aerospace and defense, high tech industries, business services, software, beverage food and tobacco, hotel gamming and leisure, banking finance insurance and in real estate sector. The fund seeks to invest across United States of America, Luxembourg, Cayman Islands, Cyprus, and United Kingdom. It invests in companies with EBITDA between $25 million and $100 million.

About Netcapital

Netcapital Inc. operates as a fintech company. It offers Netcapital.com, an SEC-registered funding portal that enables private companies to raise capital online, as well as allows investors to invest from anywhere in the world. The company also provides various services, including automated onboarding process and filing of required regulatory documents; compliance review; custom-built offering page on its portal website; third party transfer agent and custodial services; and rolling closes which provides access to liquidity before final close date of offerings, as well as assistance with annual fillings and direct access to team for ongoing support. In addition, it offers advisor services, which includes incubation of technology start-ups; investors introduction; online marketing; website design and software development; message crafting including pitch decks, offering pages, and ad creation; strategic advice; and technology consulting services. Further, the company provides valuation services, such as business valuation, fairness and solvency opinions, ESOP feasibility and valuation, non-cash charitable contribution, economic analysis of damages, intellectual property appraisals, and compensation studies. Netcapital Inc. is based in Boston, Massachusetts.