Head-To-Head Review: Bain Capital Specialty Finance (BCSF) vs. Falcon Minerals (FLMN)

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Bain Capital Specialty Finance (NYSE:BCSF) and Falcon Minerals (NASDAQ:FLMN) are both small-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their profitability, risk, institutional ownership, earnings, valuation, dividends and analyst recommendations.

Profitability

This table compares Bain Capital Specialty Finance and Falcon Minerals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Bain Capital Specialty Finance 26.82% 6.87% 3.98%
Falcon Minerals N/A 14.99% 7.08%

Dividends

Bain Capital Specialty Finance pays an annual dividend of $1.64 per share and has a dividend yield of 8.4%. Falcon Minerals pays an annual dividend of $0.80 per share and has a dividend yield of 9.8%. Bain Capital Specialty Finance pays out 113.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Falcon Minerals pays out 400.0% 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 recent ratings and target prices for Bain Capital Specialty Finance and Falcon Minerals, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Bain Capital Specialty Finance 0 2 3 0 2.60
Falcon Minerals 0 2 4 0 2.67

Bain Capital Specialty Finance currently has a consensus price target of $20.25, indicating a potential upside of 3.32%. Falcon Minerals has a consensus price target of $10.42, indicating a potential upside of 27.81%. Given Falcon Minerals’ stronger consensus rating and higher probable upside, analysts plainly believe Falcon Minerals is more favorable than Bain Capital Specialty Finance.

Valuation & Earnings

This table compares Bain Capital Specialty Finance and Falcon Minerals’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Bain Capital Specialty Finance $99.29 million 10.20 $26.65 million $1.45 13.52
Falcon Minerals $97.20 million 4.42 $90.13 million $0.20 40.75

Falcon Minerals has lower revenue, but higher earnings than Bain Capital Specialty Finance. Bain Capital Specialty Finance is trading at a lower price-to-earnings ratio than Falcon Minerals, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

9.3% of Bain Capital Specialty Finance shares are owned by institutional investors. Comparatively, 64.6% of Falcon Minerals shares are owned by institutional investors. 0.2% of Bain Capital Specialty Finance shares are owned by insiders. Comparatively, 8.6% of Falcon Minerals shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

Falcon Minerals beats Bain Capital Specialty Finance on 10 of the 15 factors compared between the two stocks.

Bain Capital Specialty Finance Company Profile

Bain Capital Specialty Finance, Inc. operates as a business development company (BDC) specializing in direct loans to middle-market companies. The fund seeks to invest in senior investments with a first or second lien on collateral, senior first lien, stretch senior, senior second lien, unitranche, mezzanine debt, junior securities, other junior investments, and secondary purchases of assets or portfolios that primarily consist of middle-market corporate debt. It typically invests in companies with EBITDA between $10 million and $150 million.

Falcon Minerals Company Profile

Falcon Minerals Corporation acquires and owns mineral, royalty, and over-riding royalty interests in oil and natural gas properties in North America. It owns interests covering approximately 256,000 gross unit acres in the Eagle Ford Shale and Austin Chalk in Karnes, DeWitt, and Gonzales Counties in Texas, as well as approximately 68,000 gross unit acres in Pennsylvania, Ohio, and West Virginia that is prospective for the Marcellus Shale. The company is based in Philadelphia, Pennsylvania.

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