Financial Comparison: StoneCastle Financial Corp (BANX) vs. TPG Specialty Lending (TSLX)
StoneCastle Financial Corp (NASDAQ: BANX) and TPG Specialty Lending (NYSE:TSLX) are both small-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their dividends, risk, institutional ownership, profitability, valuation, earnings and analyst recommendations.
This table compares StoneCastle Financial Corp and TPG Specialty Lending’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|StoneCastle Financial Corp||66.86%||N/A||N/A|
|TPG Specialty Lending||56.43%||12.63%||7.53%|
Insider and Institutional Ownership
32.1% of StoneCastle Financial Corp shares are owned by institutional investors. Comparatively, 62.7% of TPG Specialty Lending shares are owned by institutional investors. 8.0% of StoneCastle Financial Corp shares are owned by insiders. Comparatively, 4.8% of TPG Specialty Lending shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
This is a summary of recent ratings for StoneCastle Financial Corp and TPG Specialty Lending, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|StoneCastle Financial Corp||0||0||4||0||3.00|
|TPG Specialty Lending||0||1||2||0||2.67|
StoneCastle Financial Corp currently has a consensus target price of $22.75, indicating a potential upside of 10.98%. TPG Specialty Lending has a consensus target price of $21.33, indicating a potential upside of 4.47%. Given StoneCastle Financial Corp’s stronger consensus rating and higher possible upside, analysts plainly believe StoneCastle Financial Corp is more favorable than TPG Specialty Lending.
Valuation and Earnings
This table compares StoneCastle Financial Corp and TPG Specialty Lending’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|StoneCastle Financial Corp||$17.03 million||7.87||$7.01 million||$1.76||11.65|
|TPG Specialty Lending||$192.41 million||6.39||$107.33 million||$1.96||10.42|
TPG Specialty Lending has higher revenue and earnings than StoneCastle Financial Corp. TPG Specialty Lending is trading at a lower price-to-earnings ratio than StoneCastle Financial Corp, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
StoneCastle Financial Corp has a beta of 0.2, indicating that its share price is 80% less volatile than the S&P 500. Comparatively, TPG Specialty Lending has a beta of 0.69, indicating that its share price is 31% less volatile than the S&P 500.
StoneCastle Financial Corp pays an annual dividend of $1.52 per share and has a dividend yield of 7.4%. TPG Specialty Lending pays an annual dividend of $1.56 per share and has a dividend yield of 7.6%. StoneCastle Financial Corp pays out 86.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. TPG Specialty Lending pays out 79.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. TPG Specialty Lending is clearly the better dividend stock, given its higher yield and lower payout ratio.
TPG Specialty Lending beats StoneCastle Financial Corp on 9 of the 16 factors compared between the two stocks.
StoneCastle Financial Corp Company Profile
StoneCastle Financial Corp. is a non-diversified, closed-end management investment company. The Company’s primary investment objective is to provide stockholders with current income, and to a lesser extent capital appreciation. The Company generally invests in the senior debt, subordinated debt, preferred shares and common stock of community banks. The Company’s investment portfolio includes term loans, debt securities, trust preferred securities, preferred shares of credit securitization, preferred securities, convertible preferred stock, common stock, exchange traded fund, limited partnership interest and money market fund. The Company invests in bank issuers of various locations, such as California, Colorado, Florida, Georgia, Illinois, Kansas, Maine, Maryland, New Jersey, New York, Ohio, North Carolina, Oklahoma, South Carolina, Texas and West Virginia.
TPG Specialty Lending Company Profile
TPG Specialty Lending, Inc. is an externally managed, closed-end, non-diversified management investment company. The Company is a specialty finance company focused on lending to middle-market companies. It seeks to generate current income primarily in the United States-domiciled middle-market companies through direct originations of senior secured loans and originations of mezzanine and unsecured loans and investments in corporate bonds and equity securities. The Company invests in first-lien debt, second-lien debt, mezzanine and unsecured debt and equity and other investments. Its first-lien debt may include standalone first-lien loans; last out first-lien loans; unitranche loans and secured corporate bonds. Its second-lien debt may include secured loans and secured corporate bonds, with a secondary priority behind first-lien debt. As of December 31, 2016, the Company’s portfolio was invested across 19 different industries. The Company’s investment advisor is TSL Advisers, LLC.
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