Stellus Capital Investment Corporation (NYSE: SCM) is one of 576 public companies in the “Closed End Funds” industry, but how does it contrast to its rivals? We will compare Stellus Capital Investment Corporation to similar companies based on the strength of its profitability, dividends, valuation, analyst recommendations, institutional ownership, earnings and risk.

Volatility & Risk

Stellus Capital Investment Corporation has a beta of 0.56, suggesting that its stock price is 44% less volatile than the S&P 500. Comparatively, Stellus Capital Investment Corporation’s rivals have a beta of 0.55, suggesting that their average stock price is 45% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations for Stellus Capital Investment Corporation and its rivals, 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
Stellus Capital Investment Corporation Competitors 196 1200 1418 14 2.44

Stellus Capital Investment Corporation presently has a consensus price target of $14.83, indicating a potential upside of 4.98%. As a group, “Closed End Funds” companies have a potential upside of 46.71%. Given Stellus Capital Investment Corporation’s rivals higher probable upside, analysts clearly believe Stellus Capital Investment Corporation has less favorable growth aspects than its rivals.

Dividends

Stellus Capital Investment Corporation pays an annual dividend of $1.36 per share and has a dividend yield of 9.6%. Stellus Capital Investment Corporation pays out 64.2% of its earnings in the form of a dividend. As a group, “Closed End Funds” companies pay a dividend yield of 8.8% and pay out 87.0% of their earnings in the form of a dividend. Stellus Capital Investment Corporation is clearly a better dividend stock than its rivals, given its higher yield and lower payout ratio.

Insider & Institutional Ownership

26.5% of Stellus Capital Investment Corporation shares are held by institutional investors. Comparatively, 23.2% of shares of all “Closed End Funds” companies are held by institutional investors. 4.2% of Stellus Capital Investment Corporation shares are held by company insiders. Comparatively, 3.5% of shares of all “Closed End Funds” companies are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Stellus Capital Investment Corporation and its rivals top-line revenue, earnings per share and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Stellus Capital Investment Corporation N/A N/A 6.67
Stellus Capital Investment Corporation Competitors $57.58 million $38.86 million 0.03

Stellus Capital Investment Corporation’s rivals have higher revenue and earnings than Stellus Capital Investment Corporation. Stellus Capital Investment Corporation is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Profitability

This table compares Stellus Capital Investment Corporation and its rivals’ 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%
Stellus Capital Investment Corporation Competitors -47.82% 6.85% 5.29%

Summary

Stellus Capital Investment Corporation beats its rivals on 10 of the 14 factors compared.

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.

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