Stellus Capital Investment Corporation (NYSE: SCM) and BlackRock Enhanced Global Dividend Trust (NYSE:BOE) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, dividends, earnings, analyst recommendations, profitability, institutional ownership and risk.

Dividends

Stellus Capital Investment Corporation pays an annual dividend of $1.36 per share and has a dividend yield of 9.7%. BlackRock Enhanced Global Dividend Trust does not pay a dividend. Stellus Capital Investment Corporation pays out 64.2% of its earnings in the form of a dividend.

Profitability

This table compares Stellus Capital Investment Corporation and BlackRock Enhanced Global Dividend Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Stellus Capital Investment Corporation 68.17% 10.06% 5.01%
BlackRock Enhanced Global Dividend Trust N/A N/A N/A

Insider and Institutional Ownership

26.5% of Stellus Capital Investment Corporation shares are held by institutional investors. 4.2% of Stellus Capital Investment Corporation shares are held by 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.

Valuation & Earnings

This table compares Stellus Capital Investment Corporation and BlackRock Enhanced Global Dividend Trust’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Stellus Capital Investment Corporation N/A N/A N/A $2.12 6.63
BlackRock Enhanced Global Dividend Trust N/A N/A N/A N/A N/A

Analyst Ratings

This is a summary of recent ratings and price targets for Stellus Capital Investment Corporation and BlackRock Enhanced Global Dividend Trust, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Stellus Capital Investment Corporation 0 1 3 0 2.75
BlackRock Enhanced Global Dividend Trust 0 0 0 0 N/A

Stellus Capital Investment Corporation presently has a consensus target price of $14.83, suggesting a potential upside of 5.58%. Given Stellus Capital Investment Corporation’s higher probable upside, research analysts clearly believe Stellus Capital Investment Corporation is more favorable than BlackRock Enhanced Global Dividend Trust.

Summary

Stellus Capital Investment Corporation beats BlackRock Enhanced Global Dividend Trust on 8 of the 9 factors compared between the two stocks.

Stellus Capital Investment Corporation Company Profile

Stellus Capital Investment Corporation is a closed-end, non-diversified management investment company. The Company originates and invests primarily in private middle-market companies through first lien, second lien, unitranche and mezzanine debt financing, with corresponding equity co-investments. The Company’s investment objective is to maximize the total return to its stockholders in the form of current income and capital appreciation. It invests in various sectors, such as business services, energy, general industrial, government services, healthcare, software and specialty finance. Its investment advisor is Stellus Capital Management, LLC (Stellus Capital Management). Stellus Capital Management is responsible for analyzing investment opportunities, conducting research and performing due diligence on investments, negotiating and structuring the Company’s investments, originating prospective investments, and monitoring its investments and portfolio companies on an ongoing basis.

BlackRock Enhanced Global Dividend Trust Company Profile

BlackRock Enhanced Global Dividend Trust (the Trust), formerly BlackRock Global Opportunities Equity Trust, is a diversified, closed-end management investment company. The Trust’s investment objective is to provide current income and current gains, with a secondary objective of long-term capital appreciation. The Trust seeks to achieve its investment objectives by investing primarily in equity securities issued by companies located in countries throughout the world and utilizing an option writing (selling) strategy. The Trust focuses on investing in sectors, including information technology, financials, healthcare, materials, energy and utilities. The Trust invests at least 80% of its assets in equity securities or options on equity securities or indices or sectors of equity securities. The Trust invests amount of its total assets in foreign issuers. BlackRock Advisors, LLC is its investment advisor.

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