Reviewing Liberty All-Star Equity Fund (USA) and OFS Capital Corporation (OFS)
Liberty All-Star Equity Fund (NYSE: USA) and OFS Capital Corporation (NASDAQ:OFS) are both small-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their profitabiliy, valuation, dividends, earnings, analyst recommendations, institutional ownership and risk.
Liberty All-Star Equity Fund pays an annual dividend of $0.13 per share and has a dividend yield of 2.3%. OFS Capital Corporation pays an annual dividend of $1.36 per share and has a dividend yield of 10.0%. OFS Capital Corporation pays out 80.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
This table compares Liberty All-Star Equity Fund and OFS Capital Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Liberty All-Star Equity Fund||N/A||N/A||N/A|
|OFS Capital Corporation||52.47%||9.63%||4.60%|
Earnings and Valuation
This table compares Liberty All-Star Equity Fund and OFS Capital Corporation’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Liberty All-Star Equity Fund||N/A||N/A||N/A||N/A||N/A|
|OFS Capital Corporation||N/A||N/A||N/A||$1.70||8.04|
Insider and Institutional Ownership
31.0% of Liberty All-Star Equity Fund shares are owned by institutional investors. Comparatively, 25.5% of OFS Capital Corporation shares are owned by institutional investors. 0.1% of Liberty All-Star Equity Fund shares are owned by company insiders. Comparatively, 0.0% of OFS Capital Corporation shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
This is a breakdown of current recommendations for Liberty All-Star Equity Fund and OFS Capital Corporation, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Liberty All-Star Equity Fund||0||2||2||0||2.50|
|OFS Capital Corporation||1||0||4||0||2.60|
Liberty All-Star Equity Fund currently has a consensus price target of $44.50, suggesting a potential upside of 672.57%. OFS Capital Corporation has a consensus price target of $14.75, suggesting a potential upside of 7.98%. Given Liberty All-Star Equity Fund’s higher probable upside, research analysts clearly believe Liberty All-Star Equity Fund is more favorable than OFS Capital Corporation.
Volatility & Risk
Liberty All-Star Equity Fund has a beta of 1.22, indicating that its stock price is 22% more volatile than the S&P 500. Comparatively, OFS Capital Corporation has a beta of 0.45, indicating that its stock price is 55% less volatile than the S&P 500.
OFS Capital Corporation beats Liberty All-Star Equity Fund on 6 of the 11 factors compared between the two stocks.
About Liberty All-Star Equity Fund
Liberty All-Star Equity Fund is a diversified, closed-end management investment fund. The Fund seeks total investment return comprising long-term capital appreciation and current income through investing primarily in a diversified portfolio of equity securities. It allocates its portfolio assets on an approximately equal basis among several independent investment management organizations having various investment styles recommended and monitored by its investment advisor. It invests at least 80% of its net assets in a diversified portfolio of equity securities. The Fund invests in various sectors, including financials, information technology, healthcare, consumer discretionary, consumer staples, industrials, energy, materials, real estate, utilities and telecommunication services. Its investment managers invest primarily for pension funds, endowments, foundations and other institutions. The Fund’s investment advisor is ALPS Advisors, Inc.
About OFS Capital Corporation
OFS Capital Corporation (OFS Capital) is an externally managed, closed-end, non-diversified management investment company. The Company’s investment objective is to provide its shareholders with both current income and capital appreciation primarily through debt investments and equity investments. It focuses primarily on middle-market companies in the United States, including senior secured loans, including first-lien, second-lien and unitranche loans, as well as subordinated loans, and warrants and other minority equity securities. The Company may make investments directly or through OFS SBIC I, LP (SBIC I LP), its investment company subsidiary. It focuses on investments in loans, in which OFS Advisor’s investment professionals have expertise, including investments in first-lien, unitranche, second-lien, and mezzanine loans and, to a lesser extent, on warrants and other equity securities. The Company’s investment activities are managed by OFS Capital Management, LLC (OFS Advisor).
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