Financial Contrast: XP (NASDAQ:XP) versus Goldman Sachs BDC (NYSE:GSBD)

XP (NASDAQ:XP) and Goldman Sachs BDC (NYSE:GSBD) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, earnings, institutional ownership, risk, dividends, analyst recommendations and profitability.

Volatility & Risk

XP has a beta of 1.01, indicating that its share price is 1% more volatile than the S&P 500. Comparatively, Goldman Sachs BDC has a beta of 0.61, indicating that its share price is 39% less volatile than the S&P 500.

Profitability

This table compares XP and Goldman Sachs BDC’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
XP	27.20%	22.19%	1.33%
Goldman Sachs BDC	17.19%	11.04%	4.62%

Dividends

XP pays an annual dividend of $0.40 per share and has a dividend yield of 2.5%. Goldman Sachs BDC pays an annual dividend of $1.28 per share and has a dividend yield of 14.4%. XP pays out 20.9% of its earnings in the form of a dividend. Goldman Sachs BDC pays out 246.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Ratings

This is a breakdown of current recommendations for XP and Goldman Sachs BDC, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
XP	0	3	4	0	2.57
Goldman Sachs BDC	3	3	0	1	1.86

XP presently has a consensus target price of $25.50, indicating a potential upside of 58.48%. Goldman Sachs BDC has a consensus target price of $8.75, indicating a potential downside of 1.30%. Given XP’s stronger consensus rating and higher probable upside, equities research analysts plainly believe XP is more favorable than Goldman Sachs BDC.

Valuation & Earnings

This table compares XP and Goldman Sachs BDC”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
XP	$8.42 billion	1.03	$925.91 million	$1.91	8.42
Goldman Sachs BDC	$365.57 million	2.73	$119.27 million	$0.52	17.05

XP has higher revenue and earnings than Goldman Sachs BDC. XP 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.

Institutional and Insider Ownership

59.2% of XP shares are owned by institutional investors. Comparatively, 28.7% of Goldman Sachs BDC shares are owned by institutional investors. 0.1% of Goldman Sachs BDC shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

XP beats Goldman Sachs BDC on 11 of the 17 factors compared between the two stocks.

About XP

XP Inc. provides financial products and services in Brazil. It offers securities brokerage, private pension plans, commercial, and investment banking products, such as loan operations and transactions in the foreign exchange markets and deposits; product structuring and capital markets services for corporate clients and issuers of fixed income products; advisory services for mass-affluent and institutional clients; and wealth management services for high-net-worth customers and institutional clients. The company also offers XP Educação, an online financial education portal that offers seminars, classes, and learning tools to help teach individuals on topics, such as basics of investing, techniques, and investment strategies, as well as insurance brokerage services. In addition, it operates XP Platform, an open product platform that provides clients to access investment products in the market, including equity and fixed income securities, mutual and hedge funds, structured products, life insurance, pension plans, real-estate investment funds, and others. The company was founded in 2001 and is based in São Paulo, Brazil.

About Goldman Sachs BDC

Goldman Sachs BDC, Inc. is a business development company specializing in middle market and mezzanine investment in private companies. It seeks to make capital appreciation through direct originations of secured debt, senior secured debt, junior secured debt, including first lien, first lien/last-out unitranche and second lien debt, unsecured debt, including mezzanine debt and, to a lesser extent, investments in equities. The fund primarily invests in United States. It seeks to invest between $10 million and $75 million in companies with EBITDA between $5 million and $75 million annually.