TCG BDC (NASDAQ: CGBD) and Federal Agricultural Mortgage (NYSE:AGM.A) are both small-cap financials companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, dividends, risk, earnings, analyst recommendations, valuation and profitability.
This is a breakdown of recent recommendations for TCG BDC and Federal Agricultural Mortgage, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Federal Agricultural Mortgage||0||0||0||0||N/A|
Institutional & Insider Ownership
9.1% of TCG BDC shares are held by institutional investors. 0.1% of TCG BDC shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Earnings and Valuation
This table compares TCG BDC and Federal Agricultural Mortgage’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|TCG BDC||$110.97 million||9.74||$69.80 million||$1.56||11.13|
|Federal Agricultural Mortgage||N/A||N/A||N/A||$7.43||9.56|
TCG BDC has higher revenue and earnings than Federal Agricultural Mortgage. Federal Agricultural Mortgage is trading at a lower price-to-earnings ratio than TCG BDC, indicating that it is currently the more affordable of the two stocks.
TCG BDC pays an annual dividend of $1.48 per share and has a dividend yield of 8.5%. Federal Agricultural Mortgage does not pay a dividend. TCG BDC pays out 94.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
This table compares TCG BDC and Federal Agricultural Mortgage’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Federal Agricultural Mortgage||21.05%||14.97%||0.50%|
TCG BDC beats Federal Agricultural Mortgage on 8 of the 11 factors compared between the two stocks.
About TCG BDC
TCG BDC, Inc., formerly Carlyle GMS Finance, Inc., is a managed and non-diversified closed-end investment company. The Company is focused on lending to middle market companies. The Company’s investment objective is to generate current income and capital appreciation primarily through debt investments in the United States and middle market companies. The Company seeks to achieve its investment objective primarily through direct originations of secured debt, including first lien senior secured loans and second lien senior secured loans. The Company’s first lien senior secured loans include stand-alone first lien loans, first lien/last out loans, and unitranche loans. Second lien senior secured loans (Middle Market Senior Loans), with the balance of its assets invested yielding in higher investments include unsecured debt, mezzanine debt and investments in equities. The Company’s investment adviser is Carlyle GMS Investment Management L.L.C.
About Federal Agricultural Mortgage
Federal Agricultural Mortgage Corporation (Farmer Mac) provides a secondary market for a range of loans made to borrowers in rural America. The Company’s segments include Farm & Ranch, USDA Guarantees, Rural Utilities, Institutional Credit and Corporate. Its secondary market activities are purchasing eligible loans directly from lenders; providing advances against eligible loans by purchasing obligations secured by those loans; securitizing assets and guaranteeing the payment of principal and interest on the resulting securities that represent interests in, or obligations secured by, pools of eligible loans; and issuing long-term standby purchase commitments (LTSPCs) for eligible loans. The loans eligible for the secondary market provided by Farmer Mac include mortgage loans secured by first liens on agricultural real estate, including part-time farms and rural housing (comprising the assets eligible for the Farm & Ranch line of business).
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