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

Analyst Ratings

This is a breakdown of recent ratings for Solar Capital and its peers, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Solar Capital 0 3 2 0 2.40
Solar Capital Competitors 201 1214 1426 14 2.44

Solar Capital presently has a consensus price target of $23.10, indicating a potential upside of 9.48%. As a group, “Closed End Funds” companies have a potential upside of 18.27%. Given Solar Capital’s peers stronger consensus rating and higher probable upside, analysts plainly believe Solar Capital has less favorable growth aspects than its peers.

Earnings & Valuation

This table compares Solar Capital and its peers top-line revenue, earnings per share and valuation.

Gross Revenue NetIncome Price/Earnings Ratio
Solar Capital $151.84 $106.81 11.22
Solar Capital Competitors $118.53 $49.80 4.06

Solar Capital has higher revenue and earnings than its peers. Solar Capital 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.

Profitability

This table compares Solar Capital and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Solar Capital 54.87% 7.30% 3.96%
Solar Capital Competitors -49.30% 6.82% 5.25%

Dividends

Solar Capital pays an annual dividend of $1.60 per share and has a dividend yield of 7.6%. Solar Capital pays out 85.1% 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 9.6% and pay out 104.5% of their earnings in the form of a dividend.

Insider & Institutional Ownership

62.8% of Solar Capital shares are owned by institutional investors. Comparatively, 23.2% of shares of all “Closed End Funds” companies are owned by institutional investors. 5.9% of Solar Capital shares are owned by company insiders. Comparatively, 3.5% of shares of all “Closed End Funds” companies are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Risk & Volatility

Solar Capital has a beta of 0.55, meaning that its stock price is 45% less volatile than the S&P 500. Comparatively, Solar Capital’s peers have a beta of 0.54, meaning that their average stock price is 46% less volatile than the S&P 500.

Summary

Solar Capital beats its peers on 9 of the 15 factors compared.

About Solar Capital

Solar Capital Ltd. is a closed-end, externally managed, non-diversified management investment company. The Company’s investment objective is to generate both current income and capital appreciation through debt and equity investments. It invests in privately held the United States middle market companies. It invests in leveraged middle market companies in the form of senior secured loans, unitranche loans, mezzanine loans and equity securities. It may also invest in public companies that are thinly traded. Its business is focused primarily on the direct origination of investments through portfolio companies or their financial sponsors. Its investments generally range between $5 million and $100 million each. In addition, the Company may invest a portion of its portfolio in other types of investments, which it refers to as opportunistic investments. The Company’s investment activities are managed by Solar Capital Partners, LLC (Solar Capital Partners or the Investment Advisor).

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