Full Circle Capital Corp (NASDAQ: FULL) and KCAP Financial (NASDAQ:KCAP) are both financials companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, earnings, dividends, institutional ownership, valuation, risk and profitability.

Earnings & Valuation

This table compares Full Circle Capital Corp and KCAP Financial’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Full Circle Capital Corp N/A N/A N/A N/A N/A
KCAP Financial $32.54 million 3.93 $5.55 million $0.15 23.07

KCAP Financial has higher revenue and earnings than Full Circle Capital Corp.

Risk and Volatility

Full Circle Capital Corp has a beta of 0.37, suggesting that its share price is 63% less volatile than the S&P 500. Comparatively, KCAP Financial has a beta of 1.69, suggesting that its share price is 69% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Full Circle Capital Corp and KCAP Financial, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Full Circle Capital Corp 0 0 0 0 N/A
KCAP Financial 0 2 1 0 2.33

KCAP Financial has a consensus target price of $9.75, indicating a potential upside of 181.79%. Given KCAP Financial’s higher probable upside, analysts clearly believe KCAP Financial is more favorable than Full Circle Capital Corp.

Dividends

KCAP Financial pays an annual dividend of $0.48 per share and has a dividend yield of 13.9%. Full Circle Capital Corp does not pay a dividend. KCAP Financial pays out 320.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Institutional & Insider Ownership

20.2% of KCAP Financial shares are owned by institutional investors. 8.0% of KCAP Financial shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Full Circle Capital Corp and KCAP Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Full Circle Capital Corp -11.16% -1.78% -1.24%
KCAP Financial 17.53% 7.44% 3.84%

Summary

KCAP Financial beats Full Circle Capital Corp on 10 of the 11 factors compared between the two stocks.

About Full Circle Capital Corp

Full Circle Capital Corporation is a non-diversified closed-end management investment company. The Company’s investment objective is to generate both current income and capital appreciation through debt and equity investments. The Company invests primarily in senior secured loans and second lien loans, mezzanine loans and equity securities issued by lower middle-market and middle-market companies that operate in a range of industries. In its lending activities, the Company focuses primarily on portfolio companies with both tangible and intangible assets available as collateral and security against its loan to help mitigate its risk of loss, and cash flow to cover debt service. The Company focuses primarily on senior secured loans and stretch senior secured loans (unitranche loans), which combine characteristics of first-lien senior secured loans and second-lien or subordinated loans. The Company’s investment advisor is Full Circle Advisors, LLC (Full Circle Advisors).

About KCAP Financial

KCAP Financial, Inc. is an internally managed, non-diversified closed-end investment company. The Company has approximately three principal areas of investments. First, the Company originates, structures and invests in senior secured term loans and mezzanine debt primarily in privately-held middle market companies (the debt securities portfolio). In addition, the Company may invest in the equity securities of privately held middle market companies. Second, the Company invests in asset management companies (the Asset Manager Affiliates) that manage collateralized loan obligation funds (CLO Funds). Third, the Company invests in debt and subordinated securities issued by CLOs (CLO fund securities). These CLO fund securities are primarily managed by its Asset Manager Affiliates, but from time-to-time the Company makes investments in CLO Fund Securities managed by other asset managers. The CLO funds typically invest in syndicated loans, high-yield bonds and other credit instruments.

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