MFS Charter Income Trust (NYSE: MCR) and Harvest Capital Credit Corporation (NASDAQ:HCAP) are both financials companies, but which is the better stock? We will contrast the two companies based on the strength of their analyst recommendations, valuation, institutional ownership, risk, earnings, dividends and profitability.

Dividends

Harvest Capital Credit Corporation pays an annual dividend of $1.35 per share and has a dividend yield of 10.2%. MFS Charter Income Trust does not pay a dividend. Harvest Capital Credit Corporation pays out 150.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Insider and Institutional Ownership

5.8% of Harvest Capital Credit Corporation shares are owned by institutional investors. 9.5% of Harvest Capital Credit Corporation shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and recommmendations for MFS Charter Income Trust and Harvest Capital Credit Corporation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
MFS Charter Income Trust 0 0 0 0 N/A
Harvest Capital Credit Corporation 0 1 0 0 2.00

Harvest Capital Credit Corporation has a consensus price target of $13.50, indicating a potential upside of 1.96%. Given Harvest Capital Credit Corporation’s higher possible upside, analysts plainly believe Harvest Capital Credit Corporation is more favorable than MFS Charter Income Trust.

Profitability

This table compares MFS Charter Income Trust and Harvest Capital Credit Corporation’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
Harvest Capital Credit Corporation 27.50% 11.71% 6.97%

Valuation & Earnings

This table compares MFS Charter Income Trust and Harvest Capital Credit Corporation’s gross revenue, earnings per share (EPS) 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
Harvest Capital Credit Corporation N/A N/A N/A $0.90 14.71

Summary

Harvest Capital Credit Corporation beats MFS Charter Income Trust on 7 of the 8 factors compared between the two stocks.

MFS Charter Income Trust Company Profile

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.

Harvest Capital Credit Corporation Company Profile

Harvest Capital Credit Corporation is an externally managed, closed-end, non-diversified management investment company. The Company operates as a business development company and provides customized financing solutions for small to mid-sized companies. Its investment objective is to generate both current income and capital appreciation by making direct investments in the form of subordinated debt, senior debt, and to a lesser extent, minority equity investments in privately-held the United States small to mid-sized companies. Its investment portfolio includes over 56.8% of senior secured term loans, 40.8% of junior secured term loans, 1.3% of equity investments and 1.1% of collateralized loan obligation (CLO) equity at fair value. It may also invest in other investments, such as loans to larger, publicly-traded companies, high-yield bonds and distressed debt securities. It may also invest in debt and equity securities issued by CLO funds. HCAP Advisors LLC is its investment adviser.

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