Contrasting Blue Owl Capital Co. III (NYSE:OBDE) & Bain Capital Specialty Finance (NYSE:BCSF)

Bain Capital Specialty Finance (NYSE:BCSF) and Blue Owl Capital Co. III (NYSE:OBDE) are both small-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, earnings, institutional ownership, dividends, valuation, analyst recommendations and risk.

Profitability

This table compares Bain Capital Specialty Finance and Blue Owl Capital Co. III’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bain Capital Specialty Finance	43.62%	11.90%	5.43%
Blue Owl Capital Co. III	45.35%	11.52%	5.22%

Valuation & Earnings

This table compares Bain Capital Specialty Finance and Blue Owl Capital Co. III”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bain Capital Specialty Finance	$297.79 million	4.04	$123.38 million	$1.99	9.35
Blue Owl Capital Co. III	$244.17 million	7.14	$271.96 million	$1.76	8.03

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

Dividends

Bain Capital Specialty Finance pays an annual dividend of $1.68 per share and has a dividend yield of 9.0%. Blue Owl Capital Co. III pays an annual dividend of $1.40 per share and has a dividend yield of 9.9%. Bain Capital Specialty Finance pays out 84.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Blue Owl Capital Co. III pays out 79.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Blue Owl Capital Co. III is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Bain Capital Specialty Finance and Blue Owl Capital Co. III, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bain Capital Specialty Finance	0	1	1	0	2.50
Blue Owl Capital Co. III	0	0	1	0	3.00

Bain Capital Specialty Finance presently has a consensus target price of $17.50, indicating a potential downside of 5.99%. Blue Owl Capital Co. III has a consensus target price of $16.00, indicating a potential upside of 13.15%. Given Blue Owl Capital Co. III’s stronger consensus rating and higher probable upside, analysts plainly believe Blue Owl Capital Co. III is more favorable than Bain Capital Specialty Finance.

Summary

Blue Owl Capital Co. III beats Bain Capital Specialty Finance on 7 of the 12 factors compared between the two stocks.

About Bain Capital Specialty Finance

Bain Capital Specialty Finance, Inc. is business development company 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.

About Blue Owl Capital Co. III

Blue Owl Capital Corporation is a specialty finance company focused on lending to U.S. middle-market companies. Blue Owl Capital Corporation is based in NEW YORK.