Financial Comparison: Barings BDC (NYSE:BBDC) & Brookfield Asset Management (NYSE:BAM)

Barings BDC (NYSE:BBDC) and Brookfield Asset Management (NYSE:BAM) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, profitability, valuation, dividends and risk.

Volatility & Risk

Barings BDC has a beta of 0.67, suggesting that its stock price is 33% less volatile than the S&P 500. Comparatively, Brookfield Asset Management has a beta of 1.57, suggesting that its stock price is 57% more volatile than the S&P 500.

Profitability

This table compares Barings BDC and Brookfield Asset Management’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Barings BDC	45.35%	10.77%	4.78%
Brookfield Asset Management	49.36%	98.98%	67.65%

Insider and Institutional Ownership

44.1% of Barings BDC shares are owned by institutional investors. Comparatively, 68.4% of Brookfield Asset Management shares are owned by institutional investors. 0.5% of Barings BDC shares are owned by company insiders. Comparatively, 11.0% of Brookfield Asset Management shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and target prices for Barings BDC and Brookfield Asset Management, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Barings BDC	0	2	1	0	2.33
Brookfield Asset Management	1	5	5	0	2.36

Barings BDC currently has a consensus target price of $9.83, suggesting a potential downside of 1.37%. Brookfield Asset Management has a consensus target price of $42.46, suggesting a potential upside of 7.14%. Given Brookfield Asset Management’s stronger consensus rating and higher possible upside, analysts clearly believe Brookfield Asset Management is more favorable than Barings BDC.

Dividends

Barings BDC pays an annual dividend of $1.04 per share and has a dividend yield of 10.4%. Brookfield Asset Management pays an annual dividend of $1.52 per share and has a dividend yield of 3.8%. Barings BDC pays out 84.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Brookfield Asset Management pays out 140.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Barings BDC is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings and Valuation

This table compares Barings BDC and Brookfield Asset Management’s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Barings BDC	$289.20 million	3.65	$128.00 million	$1.23	8.11
Brookfield Asset Management	$383.00 million	45.92	$451.00 million	$1.08	36.69

Brookfield Asset Management has higher revenue and earnings than Barings BDC. Barings BDC is trading at a lower price-to-earnings ratio than Brookfield Asset Management, indicating that it is currently the more affordable of the two stocks.

Summary

Brookfield Asset Management beats Barings BDC on 13 of the 16 factors compared between the two stocks.

About Barings BDC

Barings BDC, Inc. is a publicly traded, externally managed investment company that has elected to be treated as a business development company under the Investment Company Act of 1940. It seeks to invest primarily in senior secured loans, first lien debt, unitranche, second lien debt, subordinated debt, equity co-investments and senior secured private debt investments in private middle-market companies that operate across a wide range of industries. It specializes in mezzanine, leveraged buyouts, management buyouts, ESOPs, change of control transactions, acquisition financings, growth financing, and recapitalizations in lower middle market, mature, and later stage companies. It invests in manufacturing and distribution; business services and technology; transportation and logistics; consumer product and services. It invests in United States. It invests in companies with EBITDA of $10 million to $75 million, typically in private equity sponsor backed.

About Brookfield Asset Management

Brookfield Asset Management Ltd. is a real estate investment firm specializing in alternative asset management services. Its renewable power and transition business includes the operates in the hydroelectric, wind, solar, distributed generation, and sustainable solution sector. The company's infrastructure business engages in the utilities, transport, midstream, and data infrastructure sectors. In addition, its private equity business offers industrial, infrastructure, and business services sectors; and real estate business, which includes housing, logistics, hospitality, science and innovation, office, and retail sectors. Further, it provides credit business; and insurance solution in the reinsurance, annuities, operating platform, and investment solutions sectors. Brookfield Asset Management Ltd. was incorporated in 2022 and is headquartered in Toronto, Canada.