Medley Capital (MCC) versus Blackrock Taxable Municipal Bond Trust (BBN) Critical Review

Medley Capital (NYSE: MCC) and Blackrock Taxable Municipal Bond Trust (NYSE:BBN) are both small-cap financials companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, dividends, institutional ownership, earnings, valuation, risk and analyst recommendations.

Dividends

Medley Capital pays an annual dividend of $0.64 per share and has a dividend yield of 12.3%. Blackrock Taxable Municipal Bond Trust does not pay a dividend. Medley Capital pays out -228.6% of its earnings in the form of a dividend.

Profitability

This table compares Medley Capital and Blackrock Taxable Municipal Bond Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Medley Capital -15.66% 7.50% 3.61%
Blackrock Taxable Municipal Bond Trust N/A N/A N/A

Analyst Recommendations

This is a breakdown of current ratings and target prices for Medley Capital and Blackrock Taxable Municipal Bond Trust, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Medley Capital 0 3 0 0 2.00
Blackrock Taxable Municipal Bond Trust 0 0 0 0 N/A

Medley Capital currently has a consensus target price of $6.17, indicating a potential upside of 18.14%. Given Medley Capital’s higher possible upside, equities research analysts plainly believe Medley Capital is more favorable than Blackrock Taxable Municipal Bond Trust.

Insider & Institutional Ownership

29.2% of Medley Capital shares are owned by institutional investors. 15.0% of Medley Capital shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Medley Capital and Blackrock Taxable Municipal Bond Trust’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Medley Capital $96.26 million 2.95 -$15.07 million ($0.28) -18.64
Blackrock Taxable Municipal Bond Trust N/A N/A N/A N/A N/A

Blackrock Taxable Municipal Bond Trust has lower revenue, but higher earnings than Medley Capital.

Risk and Volatility

Medley Capital has a beta of 1.22, meaning that its stock price is 22% more volatile than the S&P 500. Comparatively, Blackrock Taxable Municipal Bond Trust has a beta of -0.05, meaning that its stock price is 105% less volatile than the S&P 500.

Summary

Medley Capital beats Blackrock Taxable Municipal Bond Trust on 9 of the 10 factors compared between the two stocks.

About Medley Capital

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 Blackrock Taxable Municipal Bond Trust

BlackRock Taxable Municipal Bond Trust (the Trust) is a non-diversified, closed-end management investment company. The Trust’s investment objective is to seek high current income, with a secondary objective of capital appreciation. The Trust seeks to achieve its investment objectives by investing primarily in a portfolio of taxable municipal securities, including Build America Bonds (BABs), issued by state and local governments to finance capital projects, such as public schools, roads, transportation infrastructure, bridges, ports and public buildings. It also has the ability to invest up to 20% of its managed assets in securities other than taxable municipal securities. It may invest at least 80% of its managed assets in securities that at the time of purchase are investment-grade quality. It invests in various sectors, including utilities, transportation, education, tobacco, commercial services and supplies, and housing. The Trust’s investment manager is BlackRock Advisors, LLC.

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