Financial Analysis: Bain Capital Specialty Finance (NYSE:BCSF) versus New Providence Acquisition Corp. II (NASDAQ:NPAB)

New Providence Acquisition Corp. II (NASDAQ:NPAB) and Bain Capital Specialty Finance (NYSE:BCSF) are both small-cap unclassified companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, profitability, dividends, institutional ownership, risk and earnings.

Profitability

This table compares New Providence Acquisition Corp. II and Bain Capital Specialty Finance’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
New Providence Acquisition Corp. II	N/A	N/A	N/A
Bain Capital Specialty Finance	43.62%	11.90%	5.43%

Risk and Volatility

New Providence Acquisition Corp. II has a beta of 0.08, suggesting that its share price is 92% less volatile than the S&P 500. Comparatively, Bain Capital Specialty Finance has a beta of 1.12, suggesting that its share price is 12% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations and price targets for New Providence Acquisition Corp. II and Bain Capital Specialty Finance, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
New Providence Acquisition Corp. II	0	0	0	0	0.00
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 stronger consensus rating and higher probable upside, analysts clearly believe Bain Capital Specialty Finance is more favorable than New Providence Acquisition Corp. II.

Valuation and Earnings

This table compares New Providence Acquisition Corp. II 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
New Providence Acquisition Corp. II	N/A	N/A	N/A	N/A	N/A
Bain Capital Specialty Finance	$146.71 million	7.46	$123.38 million	$1.99	8.52

Bain Capital Specialty Finance has higher revenue and earnings than New Providence Acquisition Corp. II.

Summary

Bain Capital Specialty Finance beats New Providence Acquisition Corp. II on 8 of the 8 factors compared between the two stocks.

About New Providence Acquisition Corp. II

New Providence Acquisition Corp. II does not have significant operations. It intends to effect a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or other similar business combination with one or more businesses in the consumer industry. The company was incorporated in 2020 and is based in Austin, Texas.

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.