Analyzing MFS Charter Income Trust (MCR) & Alcentra Capital Corp. (ABDC)
MFS Charter Income Trust (NYSE: MCR) and Alcentra Capital Corp. (NASDAQ:ABDC) are both financials companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, earnings, analyst recommendations, profitability, institutional ownership and risk.
This table compares MFS Charter Income Trust and Alcentra Capital Corp.’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|MFS Charter Income Trust||N/A||N/A||N/A|
|Alcentra Capital Corp.||-2.77%||11.13%||6.86%|
This is a breakdown of recent ratings and target prices for MFS Charter Income Trust and Alcentra Capital Corp., as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|MFS Charter Income Trust||0||0||0||0||N/A|
|Alcentra Capital Corp.||0||3||2||0||2.40|
Alcentra Capital Corp. has a consensus price target of $13.50, suggesting a potential upside of 22.62%. Given Alcentra Capital Corp.’s higher probable upside, analysts clearly believe Alcentra Capital Corp. is more favorable than MFS Charter Income Trust.
Earnings and Valuation
This table compares MFS Charter Income Trust and Alcentra Capital Corp.’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|MFS Charter Income Trust||N/A||N/A||N/A||N/A||N/A|
|Alcentra Capital Corp.||N/A||N/A||N/A||($0.08)||-137.63|
Alcentra Capital Corp. pays an annual dividend of $1.36 per share and has a dividend yield of 12.4%. MFS Charter Income Trust does not pay a dividend. Alcentra Capital Corp. pays out -1,700.0% of its earnings in the form of a dividend.
Institutional & Insider Ownership
31.5% of Alcentra Capital Corp. shares are owned by institutional investors. 5.0% of Alcentra Capital Corp. shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
Alcentra Capital Corp. beats MFS Charter Income Trust on 8 of the 9 factors compared between the two stocks.
About MFS Charter Income Trust
MFS Charter Income Trust (Fund) is a diversified closed-end management investment company. The Fund’s investment objective is to seek high current income, but may also consider capital appreciation. The Fund normally invests in debt instruments. The Fund also invests in corporate bonds of the United States and/or foreign issuers, the United States Government securities, foreign government securities, mortgage-backed and other asset-backed securities and/or debt instruments of issuers located in emerging market countries. The Fund’s portfolio comprises bonds, floating rate loans, equities, cash and cash equivalent and other. It invests in a range of Fixed income sectors, such as high yield corporates non-united states government bonds, investment grade corporates, emerging markets bonds, commercial mortgage-backed securities, asset-backed securities and collateralized debt obligations. Massachusetts Financial Services Company is the Fund’s investment advisor.
About Alcentra Capital Corp.
Alcentra Capital Corporation is a specialty finance company that operates as a non-diversified, closed-end management investment company. The Company operates as a business development company and a regulated investment company. It provides customized debt and equity financing solutions to lower middle-market companies, which are companies having annual earnings, before interest, taxes, depreciation and amortization of between $5 million and $15 million, and/or revenues of between $10 million and $100 million. Its investments range in size from $5 million to $15 million. Its investment objective is to generate both current income and capital appreciation primarily by making direct investments in lower middle-market companies in the form of senior debt, unitranche, second lien, subordinated debt and, to a lesser extent, senior debt and minority equity investments. Its investment focus is to make loans to, and selected equity investments in, privately-held lower-middle-market companies.
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