KCAP Financial (NASDAQ: KCAP) is one of 576 public companies in the “Closed End Funds” industry, but how does it compare to its peers? We will compare KCAP Financial to related businesses based on the strength of its analyst recommendations, profitability, earnings, risk, dividends, valuation and institutional ownership.

Volatility and Risk

KCAP Financial has a beta of 1.69, meaning that its stock price is 69% more volatile than the S&P 500. Comparatively, KCAP Financial’s peers have a beta of 0.55, meaning that their average stock price is 45% less volatile than the S&P 500.

Earnings and Valuation

This table compares KCAP Financial and its peers revenue, earnings per share and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
KCAP Financial $32.54 million N/A 22.53
KCAP Financial Competitors $57.16 million $38.88 million 0.27

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

Analyst Ratings

This is a breakdown of recent recommendations and price targets for KCAP Financial and its peers, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
KCAP Financial 0 2 1 0 2.33
KCAP Financial Competitors 198 1209 1423 14 2.44

KCAP Financial currently has a consensus price target of $9.75, suggesting a potential upside of 188.46%. As a group, “Closed End Funds” companies have a potential upside of 48.69%. Given KCAP Financial’s higher probable upside, analysts clearly believe KCAP Financial is more favorable than its peers.

Dividends

KCAP Financial pays an annual dividend of $0.48 per share and has a dividend yield of 14.2%. 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. As a group, “Closed End Funds” companies pay a dividend yield of 8.8% and pay out 86.0% of their earnings in the form of a dividend.

Institutional and Insider Ownership

20.2% of KCAP Financial shares are held by institutional investors. Comparatively, 23.2% of shares of all “Closed End Funds” companies are held by institutional investors. 8.0% of KCAP Financial shares are held by company insiders. Comparatively, 4.5% 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 company is poised for long-term growth.

Profitability

This table compares KCAP Financial and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
KCAP Financial 17.53% 7.44% 3.84%
KCAP Financial Competitors -49.31% 6.82% 5.25%

KCAP Financial Company Profile

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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