Capital Southwest (NASDAQ:CSWC – Get Free Report) and Carlyle Group (NASDAQ:CG – Get Free Report) are both finance companies, but which is the better stock? We will contrast the two companies based on the strength of their earnings, institutional ownership, profitability, analyst recommendations, risk, valuation and dividends.

This is a summary of current recommendations for Capital Southwest and Carlyle Group, as reported by MarketBeat.com.

Capital Southwest currently has a consensus target price of $23.64, indicating a potential upside of 6.16%. Carlyle Group has a consensus target price of $66.14, indicating a potential upside of 13.36%. Given Carlyle Group’s higher possible upside, analysts clearly believe Carlyle Group is more favorable than Capital Southwest.

This table compares Capital Southwest and Carlyle Group”s top-line revenue, earnings per share and valuation.

Carlyle Group has higher revenue and earnings than Capital Southwest. Capital Southwest is trading at a lower price-to-earnings ratio than Carlyle Group, indicating that it is currently the more affordable of the two stocks.

This table compares Capital Southwest and Carlyle Group’s net margins, return on equity and return on assets.

23.4% of Capital Southwest shares are owned by institutional investors. Comparatively, 55.9% of Carlyle Group shares are owned by institutional investors. 2.8% of Capital Southwest shares are owned by company insiders. Comparatively, 26.3% of Carlyle Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Capital Southwest pays an annual dividend of $2.32 per share and has a dividend yield of 10.4%. Carlyle Group pays an annual dividend of $1.40 per share and has a dividend yield of 2.4%. Capital Southwest pays out 144.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Carlyle Group pays out 78.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Capital Southwest has raised its dividend for 2 consecutive years and Carlyle Group has raised its dividend for 4 consecutive years.

Capital Southwest has a beta of 0.76, suggesting that its stock price is 24% less volatile than the S&P 500. Comparatively, Carlyle Group has a beta of 2.06, suggesting that its stock price is 106% more volatile than the S&P 500.

Carlyle Group beats Capital Southwest on 13 of the 18 factors compared between the two stocks.