Solar Senior Capital (NASDAQ: SUNS) and Malaysia Fund (NYSE:MAY) are both small-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, dividends, profitability, risk, institutional ownership and earnings.

Analyst Ratings

This is a summary of current recommendations and price targets for Solar Senior Capital and Malaysia Fund, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Solar Senior Capital 0 0 1 0 3.00
Malaysia Fund 0 0 0 0 N/A

Solar Senior Capital currently has a consensus target price of $18.50, suggesting a potential upside of 4.34%.

Risk and Volatility

Solar Senior Capital has a beta of 0.63, meaning that its share price is 37% less volatile than the S&P 500. Comparatively, Malaysia Fund has a beta of 0.79, meaning that its share price is 21% less volatile than the S&P 500.

Insider & Institutional Ownership

30.2% of Solar Senior Capital shares are owned by institutional investors. 5.6% of Solar Senior Capital shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Solar Senior Capital and Malaysia Fund’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Solar Senior Capital $27.20 million 10.45 $24.25 million $1.44 12.31
Malaysia Fund N/A N/A N/A N/A N/A

Solar Senior Capital has higher revenue and earnings than Malaysia Fund.

Profitability

This table compares Solar Senior Capital and Malaysia Fund’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Solar Senior Capital 76.43% 8.39% 4.48%
Malaysia Fund N/A N/A N/A

Dividends

Solar Senior Capital pays an annual dividend of $1.41 per share and has a dividend yield of 8.0%. Malaysia Fund does not pay 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.

Summary

Solar Senior Capital beats Malaysia Fund on 8 of the 10 factors compared between the two stocks.

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).

About Malaysia Fund

The Malaysia Fund, Inc. (the Fund) is a diversified, closed-end management investment company. The Fund’s investment objective is long-term capital appreciation through investment in equity securities of Malaysian companies. The Fund invests in sectors, such as automobiles, commercial banks, construction and engineering, construction materials, diversified financial services, electric utilities, food products, healthcare equipment and supplies, hotels, restaurants and leisure, industrial conglomerates, marine, multi-utilities, and multiline retail. Morgan Stanley Investment Management Inc. (MS Investment Management) serves as the United States investment advisor.

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