Analyzing TPG Specialty Lending (NYSE:TSLX) and Liberty All-Star Equity Fund (USA)
TPG Specialty Lending (NYSE: TSLX) and Liberty All-Star Equity Fund (NYSE:USA) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their risk, valuation, analyst recommendations, dividends, earnings, institutional ownership and profitability.
This is a breakdown of recent recommendations for TPG Specialty Lending and Liberty All-Star Equity Fund, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|TPG Specialty Lending||0||2||2||0||2.50|
|Liberty All-Star Equity Fund||0||2||2||0||2.50|
TPG Specialty Lending presently has a consensus target price of $20.25, indicating a potential downside of 5.06%. Liberty All-Star Equity Fund has a consensus target price of $44.50, indicating a potential upside of 693.23%. Given Liberty All-Star Equity Fund’s higher possible upside, analysts plainly believe Liberty All-Star Equity Fund is more favorable than TPG Specialty Lending.
This table compares TPG Specialty Lending and Liberty All-Star Equity Fund’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|TPG Specialty Lending||60.77%||12.68%||7.41%|
|Liberty All-Star Equity Fund||N/A||N/A||N/A|
TPG Specialty Lending pays an annual dividend of $1.56 per share and has a dividend yield of 7.3%. Liberty All-Star Equity Fund pays an annual dividend of $0.13 per share and has a dividend yield of 2.3%. TPG Specialty Lending pays out 71.9% of its earnings in the form of a dividend.
Risk & Volatility
TPG Specialty Lending has a beta of 0.71, suggesting that its share price is 29% less volatile than the S&P 500. Comparatively, Liberty All-Star Equity Fund has a beta of 1.22, suggesting that its share price is 22% more volatile than the S&P 500.
Earnings and Valuation
This table compares TPG Specialty Lending and Liberty All-Star Equity Fund’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|TPG Specialty Lending||N/A||N/A||N/A||$2.17||9.83|
|Liberty All-Star Equity Fund||N/A||N/A||N/A||N/A||N/A|
Institutional & Insider Ownership
64.4% of TPG Specialty Lending shares are held by institutional investors. Comparatively, 31.1% of Liberty All-Star Equity Fund shares are held by institutional investors. 4.9% of TPG Specialty Lending shares are held by insiders. Comparatively, 0.1% of Liberty All-Star Equity Fund shares are held by 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.
TPG Specialty Lending beats Liberty All-Star Equity Fund on 6 of the 9 factors compared between the two stocks.
About TPG Specialty Lending
TPG Specialty Lending, Inc. is an externally managed, closed-end, non-diversified management investment company. The Company is a specialty finance company focused on lending to middle-market companies. It seeks to generate current income primarily in the United States-domiciled middle-market companies through direct originations of senior secured loans and originations of mezzanine and unsecured loans and investments in corporate bonds and equity securities. The Company invests in first-lien debt, second-lien debt, mezzanine and unsecured debt and equity and other investments. Its first-lien debt may include standalone first-lien loans; last out first-lien loans; unitranche loans and secured corporate bonds. Its second-lien debt may include secured loans and secured corporate bonds, with a secondary priority behind first-lien debt. As of December 31, 2016, the Company’s portfolio was invested across 19 different industries. The Company’s investment advisor is TSL Advisers, LLC.
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.
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