TICC Capital (NASDAQ: TICC) and Solar Senior Capital (NASDAQ:SUNS) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, earnings, valuation, analyst recommendations, dividends, risk and institutional ownership.
This table compares TICC Capital and Solar Senior Capital’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Solar Senior Capital||76.43%||8.39%||4.48%|
15.9% of TICC Capital shares are held by institutional investors. Comparatively, 30.2% of Solar Senior Capital shares are held by institutional investors. 5.9% of TICC Capital shares are held by insiders. Comparatively, 5.6% of Solar Senior Capital shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
TICC Capital pays an annual dividend of $0.80 per share and has a dividend yield of 14.3%. Solar Senior Capital pays an annual dividend of $1.41 per share and has a dividend yield of 7.9%. TICC Capital pays out 68.4% of its earnings in the form of a dividend. Solar Senior Capital pays out 97.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. TICC Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.
Volatility and Risk
TICC Capital has a beta of 0.65, indicating that its share price is 35% less volatile than the S&P 500. Comparatively, Solar Senior Capital has a beta of 0.64, indicating that its share price is 36% less volatile than the S&P 500.
This is a breakdown of current ratings and target prices for TICC Capital and Solar Senior Capital, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Solar Senior Capital||0||0||1||0||3.00|
TICC Capital presently has a consensus target price of $5.50, indicating a potential downside of 1.43%. Solar Senior Capital has a consensus target price of $18.50, indicating a potential upside of 3.58%. Given Solar Senior Capital’s stronger consensus rating and higher possible upside, analysts clearly believe Solar Senior Capital is more favorable than TICC Capital.
Earnings and Valuation
This table compares TICC Capital and Solar Senior Capital’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|TICC Capital||$69.28 million||4.15||$110.36 million||$1.17||4.77|
|Solar Senior Capital||$27.20 million||10.53||$24.25 million||$1.44||12.40|
TICC Capital has higher revenue and earnings than Solar Senior Capital. TICC Capital is trading at a lower price-to-earnings ratio than Solar Senior Capital, indicating that it is currently the more affordable of the two stocks.
TICC Capital beats Solar Senior Capital on 8 of the 15 factors compared between the two stocks.
About TICC Capital
TICC Capital Corp. is a closed-end, non-diversified management investment company. The Company’s investment objective is to maximize its portfolio’s total return. The Company primarily focuses on seeking current income by investing primarily in corporate debt securities. The Company’s debt investments may include syndicated loans and bilateral loans. The Company holds interests in structured finance investments, including collateralized loan obligation (CLO) investment vehicles that own debt securities. CLO investments may also include warehouse facilities, which are financing structures intended to aggregate loans that may be used to form the basis of a CLO vehicle. The Company may also invest in publicly traded debt and/or equity securities. Its portfolio includes its investments in various industries, such as structured finance, telecommunication services, business services, printing and publishing, and financial intermediaries. TICC Management, LLC is its investment advisor.
About Solar Senior Capital
Solar Senior Capital Ltd. is a closed-end, externally managed, non-diversified management investment company. The Company’s investment objective is to seek to maximize current income consistent with the preservation of capital. The Company seeks to achieve its investment objective by directly and indirectly investing in senior loans, including first lien, unitranche, and second lien debt instruments, made to private middle-market companies whose debt is rated below investment grade, which it refers to collectively as senior loans. It may also invest in debt of public companies that are thinly traded or in equity securities. Under normal market conditions, at least 80% of the value of its net assets (including the amount of any borrowings for investment purposes) will be invested in senior loans. It invests in privately held the United States middle-market companies. Its investment activities are managed by Solar Capital Partners, LLC (Solar Capital Partners or the Investment Advisor).
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