Head-To-Head Analysis: Barings Participation Investors (MPV) and Solar Capital (SLRC)

Barings Participation Investors (NYSE:MPV) and Solar Capital (NASDAQ:SLRC) are both small-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, profitability, analyst recommendations, valuation, risk, dividends and institutional ownership.

Dividends

Barings Participation Investors pays an annual dividend of $1.08 per share and has a dividend yield of 7.3%. Solar Capital pays an annual dividend of $1.64 per share and has a dividend yield of 7.8%. Solar Capital pays out 101.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Risk & Volatility

Barings Participation Investors has a beta of -0.08, suggesting that its share price is 108% less volatile than the S&P 500. Comparatively, Solar Capital has a beta of 0.66, suggesting that its share price is 34% less volatile than the S&P 500.

Insider and Institutional Ownership

12.9% of Barings Participation Investors shares are owned by institutional investors. Comparatively, 59.1% of Solar Capital shares are owned by institutional investors. 0.8% of Barings Participation Investors shares are owned by insiders. Comparatively, 5.9% of Solar Capital shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Barings Participation Investors and Solar Capital’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Barings Participation Investors N/A N/A N/A
Solar Capital 48.83% 8.12% 4.55%

Earnings and Valuation

This table compares Barings Participation Investors and Solar Capital’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Barings Participation Investors N/A N/A N/A N/A N/A
Solar Capital $143.34 million 6.19 $70.43 million $1.62 12.96

Solar Capital has higher revenue and earnings than Barings Participation Investors.

Analyst Recommendations

This is a summary of current recommendations for Barings Participation Investors and Solar Capital, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Barings Participation Investors 0 0 0 0 N/A
Solar Capital 0 1 4 0 2.80

Solar Capital has a consensus target price of $23.67, suggesting a potential upside of 12.70%. Given Solar Capital’s higher probable upside, analysts clearly believe Solar Capital is more favorable than Barings Participation Investors.

Summary

Solar Capital beats Barings Participation Investors on 10 of the 11 factors compared between the two stocks.

About Barings Participation Investors

Barings Participation Investors is a closed ended fixed income mutual fund launched and managed by Barings LLC. The fund invests in the fixed income markets of the United States. It primarily invests in below-investment grade, long-term corporate debt obligations which are directly purchased from its issuers. The fund also seeks to invest in warrants, conversion rights, or other equity related instruments. It benchmarks the performance of its portfolio against Standard and Poor's Industrials Composite, Russell 2000 Index, Lehman Brothers U.S. High Yield Index, and Lehman Brothers Intermediate U.S. Credit Index. The fund was formerly known as Babson Capital Participation Investors. Barings Participation Investors was formed on April 7, 1988 and is domiciled in the United States.

About Solar Capital

Solar Capital Ltd. is a business development company specializing in secured debt (first lien unitranche and second lien), subordinated (unsecured) debt, minority equity, and strategic income-oriented control equity investments in leveraged middle market companies. The fund invests in aerospace and defense; air freight & logistics; asset management; automotive; banking; beverage, food and tobacco; building products; buildings and real estate; broadcasting and entertainment; cargo transport; commercial services and supplies; communications equipment; chemicals, plastics and rubber; containers, packaging and glass; construction & engineering; diversified/conglomerate manufacturing; consumer Finance; distributors; diversified/conglomerate services; diversified financial services; diversified real estate sctivities; food products; Footwear; Education Services; diversified telecommunications services; electronics; farming and agriculture; finance; grocery; health care equipment and supplies; health care facilities; education and childcare; home and office furnishing, durable consumer products; hotels, motels, inns and gaming; insurance; restaurants, leisure, amusement, and entertainment; leisure equipment tolls and services, media, multiline retail, multi sector holdings; paper and forest products; personal products; professional services, research and consulting services, software; specialty retail; textiles apparel and luxury goods, thrifts and mortgage finance, trading companies and distributors, utilities, and wireless telecommunication services; industrial conglomerates; internet software and services, IT services, machinery; mining, steel, iron, and non precious metals; oil and gas; personal, food and miscellaneous services; printing and publishing; retail stores; telecommunications; textiles and leather; and utilities. It also invests in life sciences with focus on specialty pharmaceuticals, medical devices, biotech, health Care Providers and services; health Care technology, enabling technologies and tools. The fund primarily invests in United States. The fund's investments generally range between $5 million and $100 million. The fund invests in companies with revenues between $50 million and $1 billion and EBITDA between $15 million and $100 million. It invests in the form of senior secured loans, mezzanine loans, and equity securities. It may also seek investments in thinly traded public companies and also make secondary investments. The fund makes non-control equity investments. It primarily exits within three years of the initial capital commitment.

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