Financial Review: Nuveen Churchill Direct Lending (NYSE:NCDL) vs. TriplePoint Venture Growth BDC (NYSE:TPVG)

TriplePoint Venture Growth BDC (NYSE:TPVG) and Nuveen Churchill Direct Lending (NYSE:NCDL) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, profitability, dividends, risk, institutional ownership, earnings and analyst recommendations.

Profitability

This table compares TriplePoint Venture Growth BDC and Nuveen Churchill Direct Lending’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TriplePoint Venture Growth BDC	36.02%	12.88%	5.76%
Nuveen Churchill Direct Lending	36.83%	11.13%	4.83%

Analyst Ratings

This is a breakdown of current ratings and target prices for TriplePoint Venture Growth BDC and Nuveen Churchill Direct Lending, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TriplePoint Venture Growth BDC	1	6	0	0	1.86
Nuveen Churchill Direct Lending	0	4	1	0	2.20

TriplePoint Venture Growth BDC currently has a consensus price target of $6.25, suggesting a potential upside of 10.15%. Nuveen Churchill Direct Lending has a consensus price target of $15.75, suggesting a potential upside of 12.30%. Given Nuveen Churchill Direct Lending’s stronger consensus rating and higher probable upside, analysts clearly believe Nuveen Churchill Direct Lending is more favorable than TriplePoint Venture Growth BDC.

Dividends

TriplePoint Venture Growth BDC pays an annual dividend of $0.92 per share and has a dividend yield of 16.2%. Nuveen Churchill Direct Lending pays an annual dividend of $1.80 per share and has a dividend yield of 12.8%. TriplePoint Venture Growth BDC pays out 108.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Nuveen Churchill Direct Lending pays out 117.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. TriplePoint Venture Growth BDC is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation & Earnings

This table compares TriplePoint Venture Growth BDC and Nuveen Churchill Direct Lending”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TriplePoint Venture Growth BDC	$44.08 million	5.20	$32.05 million	$0.85	6.68
Nuveen Churchill Direct Lending	$224.04 million	3.09	$116.32 million	$1.53	9.17

Nuveen Churchill Direct Lending has higher revenue and earnings than TriplePoint Venture Growth BDC. TriplePoint Venture Growth BDC is trading at a lower price-to-earnings ratio than Nuveen Churchill Direct Lending, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

12.8% of TriplePoint Venture Growth BDC shares are owned by institutional investors. 1.5% of TriplePoint Venture Growth BDC shares are owned by company insiders. Comparatively, 0.6% of Nuveen Churchill Direct Lending shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Risk and Volatility

TriplePoint Venture Growth BDC has a beta of 1.36, indicating that its share price is 36% more volatile than the S&P 500. Comparatively, Nuveen Churchill Direct Lending has a beta of 0.4, indicating that its share price is 60% less volatile than the S&P 500.

About TriplePoint Venture Growth BDC

TriplePoint Venture Growth BDC Corp. is a business development company specializing investments in venture capital-backed companies at the growth stage investments. It also provides debt financing to venture growth space companies which includes growth capital loans, secured and customized loans, equipment financings, revolving loans and direct equity investments. The fund seeks to invest in e-commerce, entertainment, technology and life sciences sector. Within technology the areas of focus include: Security, wireless communication equipments, network system and software, business applications software, conferencing equipments/services .big data, cloud computing, data storage, electronics, energy efficiency, hardware, information services, internet and media, networking, semiconductors, software, software as a service, and other technology related subsectors and within life sciences the areas of focus include: biotechnology, bio fuels/bio mass, diagnostic testing and bioinformatics, drug delivery, drug discovery, healthcare information systems, healthcare services, medical, surgical and therapeutic devices, pharmaceuticals and other life science related subsectors. Within growth capital loans it invests between $5 million and $50 million, for equipment financings it invests between $5 million and $25 million, for revolving loans it invests between $1 million and $25 million, and for direct equity investments it may invest between $0.1 million and $5 million (generally not exceeding 5% of the company’s total equity). The debt financing products are typically structured as lines of credit and it invests through warrants and secured loans. It targeted returns between 10% and 18%. It does not take board seat in the company.

About Nuveen Churchill Direct Lending

Nuveen Churchill Direct Lending Corp. is a specialty finance company focused primarily on investing in senior secured loans to private equity-owned U.S. middle market companies. It has elected to be regulated as a business development company. Nuveen Churchill Direct Lending Corp. is based in NEW YORK.