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

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

Profitability

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

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

Risk & Volatility

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

Analyst Recommendations

This is a summary of current ratings and target prices for HCM Acquisition and Bain Capital Specialty Finance, as provided by MarketBeat.

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

Bain Capital Specialty Finance has a consensus target price of $17.00, suggesting a potential upside of 0.29%. Given Bain Capital Specialty Finance’s higher probable upside, analysts clearly believe Bain Capital Specialty Finance is more favorable than HCM Acquisition.

Institutional and Insider Ownership

11.8% of HCM Acquisition shares are owned by institutional investors. 71.2% of HCM Acquisition shares are owned by company insiders. Comparatively, 0.6% of Bain Capital Specialty Finance 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.

Valuation & Earnings

This table compares HCM Acquisition and Bain Capital Specialty Finance”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
HCM Acquisition	N/A	N/A	N/A	N/A	N/A
Bain Capital Specialty Finance	$146.76 million	7.46	$123.38 million	$2.00	8.48

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 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.

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.