Head to Head Contrast: Medley Capital Corporation (MCC) & Solar Senior Capital (SUNS)
Medley Capital Corporation (NYSE: MCC) and Solar Senior Capital (NASDAQ:SUNS) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, profitability, analyst recommendations, institutional ownership, earnings, valuation and dividends.
This table compares Medley Capital Corporation and Solar Senior Capital’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Medley Capital Corporation||-6.07%||8.04%||3.92%|
|Solar Senior Capital||76.43%||8.39%||4.47%|
Earnings and Valuation
This table compares Medley Capital Corporation and Solar Senior Capital’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Medley Capital Corporation||$120.75 million||2.60||-$27.96 million||($0.10)||-57.70|
|Solar Senior Capital||$27.20 million||10.57||$24.25 million||$1.44||12.45|
Solar Senior Capital has higher revenue, but lower earnings than Medley Capital Corporation. Medley Capital Corporation is trading at a lower price-to-earnings ratio than Solar Senior Capital, indicating that it is currently the more affordable of the two stocks.
Medley Capital Corporation pays an annual dividend of $0.64 per share and has a dividend yield of 11.1%. Solar Senior Capital pays an annual dividend of $1.41 per share and has a dividend yield of 7.9%. Medley Capital Corporation pays out -640.0% of its earnings in the form of a dividend. Solar Senior Capital pays out 97.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Medley Capital Corporation is clearly the better dividend stock, given its higher yield and lower payout ratio.
This is a summary of current ratings and recommmendations for Medley Capital Corporation and Solar Senior Capital, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Medley Capital Corporation||0||5||0||0||2.00|
|Solar Senior Capital||0||1||2||0||2.67|
Medley Capital Corporation presently has a consensus price target of $7.00, suggesting a potential upside of 21.32%. Solar Senior Capital has a consensus price target of $17.17, suggesting a potential downside of 4.26%. Given Medley Capital Corporation’s higher probable upside, equities analysts clearly believe Medley Capital Corporation is more favorable than Solar Senior Capital.
Volatility & Risk
Medley Capital Corporation has a beta of 1.21, suggesting that its share price is 21% more volatile than the S&P 500. Comparatively, Solar Senior Capital has a beta of 0.63, suggesting that its share price is 37% less volatile than the S&P 500.
Institutional and Insider Ownership
29.1% of Medley Capital Corporation shares are owned by institutional investors. Comparatively, 30.4% of Solar Senior Capital shares are owned by institutional investors. 8.7% of Medley Capital Corporation shares are owned by company insiders. Comparatively, 5.6% of Solar Senior Capital shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Solar Senior Capital beats Medley Capital Corporation on 10 of the 16 factors compared between the two stocks.
About Medley Capital Corporation
Medley Capital Corporation is a non-diversified closed-end management investment company. The Company’s investment objective is to generate current income and capital appreciation by lending directly to privately-held middle market companies, primarily through directly originated transactions to help these companies expand their business, refinance and make acquisitions. Its investment portfolio includes senior secured first lien term loans, senior secured second lien term loans, unitranche, senior secured first lien notes, subordinated notes and warrants and minority equity securities. It may invest up to 100% of its assets in securities acquired directly from issuers in privately negotiated transactions. Its portfolio of investments includes industries, including banking, finance, insurance and real estate; construction and building; healthcare and pharmaceuticals; beverage and food, and telecommunications. MCC Advisors LLC is the Company’s investment advisor.
About Solar Senior Capital
Solar Senior Capital Ltd. is a closed-end, externally managed, non-diversified management investment company. The Company’s investment objective is to seek to maximize current income consistent with the preservation of capital. The Company seeks to achieve its investment objective by directly and indirectly investing in senior loans, including first lien, unitranche, and second lien debt instruments, made to private middle-market companies whose debt is rated below investment grade, which it refers to collectively as senior loans. It may also invest in debt of public companies that are thinly traded or in equity securities. Under normal market conditions, at least 80% of the value of its net assets (including the amount of any borrowings for investment purposes) will be invested in senior loans. It invests in privately held the United States middle-market companies. Its investment activities are managed by Solar Capital Partners, LLC (Solar Capital Partners or the Investment Advisor).
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