Blackstone (NYSE:BX) versus Palmer Square Capital BDC (NYSE:PSBD) Critical Survey

Palmer Square Capital BDC (NYSE:PSBD) and Blackstone (NYSE:BX) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, analyst recommendations, risk, institutional ownership, valuation, dividends and profitability.

Analyst Ratings

This is a breakdown of recent recommendations for Palmer Square Capital BDC and Blackstone, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Palmer Square Capital BDC	0	5	0	0	2.00
Blackstone	0	12	13	0	2.52

Palmer Square Capital BDC currently has a consensus target price of $10.25, indicating a potential upside of 4.65%. Blackstone has a consensus target price of $144.57, indicating a potential upside of 21.39%. Given Blackstone’s stronger consensus rating and higher probable upside, analysts clearly believe Blackstone is more favorable than Palmer Square Capital BDC.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Palmer Square Capital BDC	-18.27%	11.33%	4.13%
Blackstone	22.11%	23.16%	9.61%

Risk & Volatility

Palmer Square Capital BDC has a beta of 0.85, suggesting that its stock price is 15% less volatile than the S&P 500. Comparatively, Blackstone has a beta of 1.52, suggesting that its stock price is 52% more volatile than the S&P 500.

Earnings & Valuation

This table compares Palmer Square Capital BDC and Blackstone”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Palmer Square Capital BDC	$124.39 million	2.37	-$3.17 million	($0.63)	-15.55
Blackstone	$14.45 billion	6.19	$3.02 billion	$4.50	26.46

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

Institutional & Insider Ownership

6.5% of Palmer Square Capital BDC shares are owned by institutional investors. Comparatively, 70.0% of Blackstone shares are owned by institutional investors. 1.1% of Palmer Square Capital BDC shares are owned by company insiders. Comparatively, 1.0% of Blackstone shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Dividends

Palmer Square Capital BDC pays an annual dividend of $1.44 per share and has a dividend yield of 14.7%. Blackstone pays an annual dividend of $4.48 per share and has a dividend yield of 3.8%. Palmer Square Capital BDC pays out -228.6% of its earnings in the form of a dividend. Blackstone pays out 99.6% 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 is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Blackstone beats Palmer Square Capital BDC on 13 of the 16 factors compared between the two stocks.

About Palmer Square Capital BDC

Palmer Square Capital BDC, Inc. is a business development company that seeks to generate income and, to a lesser extent, capital appreciation by investing in corporate credit. Its portfolio is focused primarily on senior secured loans and other debt investments, including loans to U.S. middle-market companies. The company is externally managed by Palmer Square Capital Management, an alternative credit investment manager. Its investment approach draws on the manager’s experience in corporate credit and related markets, with an emphasis on evaluating borrowers and structuring investments to manage credit risk.

About Blackstone

Blackstone Inc. is a global alternative asset manager that invests on behalf of institutional and individual investors. Its businesses span private equity, real estate, credit and insurance, infrastructure, and multi-asset investing, with strategies that include private funds and investment products for a range of clients. Founded in 1985 by Stephen A. Schwarzman and Peter G. Peterson, the firm initially focused on mergers and acquisitions advisory work before expanding into investment management.