THL Credit (NASDAQ: TCRD) is one of 553 publicly-traded companies in the “Closed End Funds” industry, but how does it compare to its peers? We will compare THL Credit to related businesses based off the strength of its earnings, valuation, dividends, institutional ownership, risk, analyst recommendations and profitability.

Profitability

This table compares THL Credit and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
THL Credit 29.81% 10.22% 5.66%
THL Credit Competitors -130.81% 7.63% 5.84%

Analyst Ratings

This is a summary of recent ratings for THL Credit and its peers, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
THL Credit 0 5 2 0 2.29
THL Credit Competitors 339 1470 1497 26 2.36

THL Credit presently has a consensus target price of $11.00, suggesting a potential upside of 18.66%. All “Closed End Funds” companies have a potential upside of 43.60%. Given THL Credit’s peers stronger consensus rating and higher probable upside, analysts clearly believe THL Credit has less favorable growth aspects than its peers.

Valuation & Earnings

This table compares THL Credit and its peers revenue, earnings per share (EPS) and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
THL Credit N/A N/A 12.53
THL Credit Competitors $57.20 million $39.05 million 0.17

THL Credit’s peers have higher revenue and earnings than THL Credit. THL Credit is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently the more expensive than other companies in its industry.

Volatility & Risk

THL Credit has a beta of 1.07, meaning that its share price is 7% more volatile than the S&P 500. Comparatively, THL Credit’s peers have a beta of 0.56, meaning that their average share price is 44% less volatile than the S&P 500.

Dividends

THL Credit pays an annual dividend of $1.08 per share and has a dividend yield of 11.7%. THL Credit pays out 145.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Closed End Funds” companies pay a dividend yield of 9.4% and pay out 92.9% of their earnings in the form of a dividend.

Insider and Institutional Ownership

45.6% of THL Credit shares are held by institutional investors. Comparatively, 23.2% of shares of all “Closed End Funds” companies are held by institutional investors. 0.8% of THL Credit shares are held by insiders. Comparatively, 3.3% of shares of all “Closed End Funds” companies are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

THL Credit peers beat THL Credit on 8 of the 13 factors compared.

THL Credit Company Profile

THL Credit, Inc. is an externally managed, non-diversified closed-end management investment company. The Company’s investment objective is to generate both current income and capital appreciation, primarily through investments in privately negotiated debt and equity securities of lower middle market companies. The Company is a direct lender to lower middle-market companies and invests primarily in directly originated first lien senior secured loans, including unitranche investments. In certain instances, it also makes second lien secured loans and subordinated, or mezzanine, debt investments, which may include an associated equity component, such as warrants, preferred stock or similar securities, and direct equity investments. Its first lien senior secured loans may be structured as traditional first lien senior secured loans or as unitranche loans. The Company’s investment activities are managed by THL Credit Advisors LLC.

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