Fifth Street Senior Floating Rate Corp. (NASDAQ: FSFR) and Kayne Anderson Energy Development (NYSE:KED) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, dividends, risk and profitability.

Profitability

This table compares Fifth Street Senior Floating Rate Corp. and Kayne Anderson Energy Development’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Fifth Street Senior Floating Rate Corp. 29.89% 7.27% 3.83%
Kayne Anderson Energy Development -3,648.20% -38.54% -22.63%

Valuation and Earnings

This table compares Fifth Street Senior Floating Rate Corp. and Kayne Anderson Energy Development’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Fifth Street Senior Floating Rate Corp. N/A N/A N/A $0.47 18.81
Kayne Anderson Energy Development N/A N/A N/A N/A N/A

Institutional and Insider Ownership

23.3% of Fifth Street Senior Floating Rate Corp. shares are owned by institutional investors. 0.4% of Fifth Street Senior Floating Rate Corp. shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Dividends

Fifth Street Senior Floating Rate Corp. pays an annual dividend of $0.76 per share and has a dividend yield of 8.6%. Kayne Anderson Energy Development does not pay a dividend. Fifth Street Senior Floating Rate Corp. pays out 161.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Ratings

This is a summary of current ratings and price targets for Fifth Street Senior Floating Rate Corp. and Kayne Anderson Energy Development, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Fifth Street Senior Floating Rate Corp. 0 2 0 0 2.00
Kayne Anderson Energy Development 0 0 1 0 3.00

Fifth Street Senior Floating Rate Corp. currently has a consensus target price of $9.25, suggesting a potential upside of 4.64%. Kayne Anderson Energy Development has a consensus target price of $20.00, suggesting a potential upside of 15.01%. Given Kayne Anderson Energy Development’s stronger consensus rating and higher probable upside, analysts clearly believe Kayne Anderson Energy Development is more favorable than Fifth Street Senior Floating Rate Corp..

Summary

Fifth Street Senior Floating Rate Corp. beats Kayne Anderson Energy Development on 6 of the 10 factors compared between the two stocks.

Fifth Street Senior Floating Rate Corp. Company Profile

Fifth Street Senior Floating Rate Corp. is a closed-end, non-diversified management investment company. The Company operates as a specialty finance company. The Company’s investment objective is to maximize its portfolio’s total return by generating current income from its debt investments while seeking to preserve its capital. The Company invests in portfolio companies primarily in the form of senior loans. The Company invests in senior secured loans, including first lien, unitranche and second lien debt instruments. The Company may also invest in unsecured loans, including subordinated loans, issued by private middle market companies, and senior and subordinated loans issued by public companies and equity investments. The senior loans that the Company targets have final maturities of 4 to 7 years. The Company seeks to invest in senior loans made primarily to private middle market companies. Fifth Street Management LLC is the investment advisor of the Company.

Kayne Anderson Energy Development Company Profile

Kayne Anderson Energy Development Company is a non-diversified, closed-end fund. The Fund’s investment objective is to generate both current income and capital appreciation, through equity and debt investments. It seeks to achieve this objective by investing approximately 80% of its total assets in securities of companies that derive their revenue from activities in the energy industry, including midstream energy companies, which operates assets used to gather, transport, process, treat, terminal and store natural gas, natural gas liquids, crude oil or refined petroleum products; upstream energy companies, which are engaged in the exploration, extraction and production of natural resources, including natural gas, natural gas liquids and crude oil, from onshore and offshore geological reservoirs, and other energy companies, which are engaged in owning, leasing, managing, producing, processing and selling of coal and coal reserves. KA Fund Advisors, LLC is the advisor of the Fund.

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