Golub Capital BDC (NASDAQ:GBDC) and KKR & Co. Inc. (NYSE:KKR) Critical Comparison

Golub Capital BDC (NASDAQ:GBDC) and KKR & Co. Inc. (NYSE:KKR) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, dividends, earnings, analyst recommendations, profitability, institutional ownership and risk.

Insider and Institutional Ownership

42.4% of Golub Capital BDC shares are held by institutional investors. Comparatively, 76.3% of KKR & Co. Inc. shares are held by institutional investors. 1.4% of Golub Capital BDC shares are held by insiders. Comparatively, 23.2% of KKR & Co. Inc. shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Golub Capital BDC and KKR & Co. Inc.’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Golub Capital BDC	21.45%	9.91%	4.39%
KKR & Co. Inc.	14.41%	5.88%	1.07%

Risk and Volatility

Golub Capital BDC has a beta of 0.41, indicating that its share price is 59% less volatile than the S&P 500. Comparatively, KKR & Co. Inc. has a beta of 1.83, indicating that its share price is 83% more volatile than the S&P 500.

Valuation & Earnings

This table compares Golub Capital BDC and KKR & Co. Inc.”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Golub Capital BDC	$870.78 million	3.79	$376.65 million	$0.65	19.57
KKR & Co. Inc.	$19.46 billion	4.35	$2.37 billion	$3.14	30.04

KKR & Co. Inc. has higher revenue and earnings than Golub Capital BDC. Golub Capital BDC is trading at a lower price-to-earnings ratio than KKR & Co. Inc., indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings and price targets for Golub Capital BDC and KKR & Co. Inc., as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Golub Capital BDC	0	2	4	1	2.86
KKR & Co. Inc.	0	4	17	0	2.81

Golub Capital BDC presently has a consensus target price of $13.90, suggesting a potential upside of 9.28%. KKR & Co. Inc. has a consensus target price of $123.58, suggesting a potential upside of 30.99%. Given KKR & Co. Inc.’s higher probable upside, analysts clearly believe KKR & Co. Inc. is more favorable than Golub Capital BDC.

Dividends

Golub Capital BDC pays an annual dividend of $1.32 per share and has a dividend yield of 10.4%. KKR & Co. Inc. pays an annual dividend of $0.78 per share and has a dividend yield of 0.8%. Golub Capital BDC pays out 203.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. KKR & Co. Inc. pays out 24.8% of its earnings in the form of a dividend. KKR & Co. Inc. has increased its dividend for 5 consecutive years.

Summary

KKR & Co. Inc. beats Golub Capital BDC on 12 of the 18 factors compared between the two stocks.

About Golub Capital BDC

Golub Capital BDC, Inc. (GBDC) is a business development company and operates as an externally managed closed-end non-diversified management investment company. It invests in debt and minority equity investments in middle-market companies that are, in most cases, sponsored by private equity investors. It typically invests in diversified consumer services, automobiles, healthcare technology, insurance, health care equipment and supplies, hotels, restaurants and leisure, healthcare providers and services, IT services and specialty retails. It seeks to invest in the United States. It primarily invests in first lien traditional senior debt, first lien one stop, junior debt and equity, senior secured, one stop, unitranche, second lien, subordinated and mezzanine loans of middle-market companies, and warrants.

About KKR & Co. Inc.

KKR & Co., Inc. operates as an investment firm. It offers alternative asset management as well as capital markets and insurance solutions. The firm’s business segments include Asset Management and Insurance Business. The Asset Management segment engages in providing private equity, real assets, credit and liquid strategies, capital markets, and principal activities. The Insurance Business segment offers retirement, life insurance and reinsurance solutions to clients across individual and institutional markets. The company was founded by Henry Kravis, George R. Roberts, and Jerome Kholberg on May 1, 1976 and is headquartered in New York, NY.