Head to Head Survey: Bain Capital Specialty Finance (NYSE:BCSF) and HCM Acquisition (NASDAQ:HCMA)

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

Analyst Ratings

This is a summary of current recommendations and price targets for Bain Capital Specialty Finance and HCM Acquisition, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bain Capital Specialty Finance	0	1	1	0	2.50
HCM Acquisition	0	0	0	0	N/A

Bain Capital Specialty Finance currently has a consensus target price of $17.00, suggesting a potential downside of 0.76%. Given Bain Capital Specialty Finance’s higher possible upside, research analysts plainly believe Bain Capital Specialty Finance is more favorable than HCM Acquisition.

Profitability

This table compares Bain Capital Specialty Finance and HCM Acquisition’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bain Capital Specialty Finance	43.90%	12.09%	5.49%
HCM Acquisition	N/A	N/A	N/A

Insider & Institutional Ownership

11.8% of HCM Acquisition shares are held by institutional investors. 0.6% of Bain Capital Specialty Finance shares are held by insiders. Comparatively, 71.2% of HCM Acquisition shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Volatility & Risk

Bain Capital Specialty Finance has a beta of 1.13, indicating that its stock price is 13% more volatile than the S&P 500. Comparatively, HCM Acquisition has a beta of -0.27, indicating that its stock price is 127% less volatile than the S&P 500.

Valuation and Earnings

This table compares Bain Capital Specialty Finance and HCM Acquisition”s 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	$297.79 million	3.71	$123.38 million	$2.00	8.57
HCM Acquisition	N/A	N/A	N/A	N/A	N/A

Bain Capital Specialty Finance has higher revenue and earnings than HCM Acquisition.

Summary

Bain Capital Specialty Finance beats HCM Acquisition on 7 of the 9 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 HCM Acquisition

HCM Acquisition Corp does not have significant operations. The company focuses on effecting a merger, share exchange, asset acquisition, share purchase, reorganization, or similar business combination with one or more businesses or entities. HCM Acquisition Corp was incorporated in 2021 and is based in Stamford, Connecticut.