Analyzing Stone Harbor Emerging Mkt Total Incom FD (EDI) & Garrison Capital (GARS)

Stone Harbor Emerging Mkt Total Incom FD (NYSE:EDI) and Garrison Capital (NASDAQ:GARS) are both financial services companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, risk, valuation, institutional ownership, profitability, dividends and analyst recommendations.

Dividends

Stone Harbor Emerging Mkt Total Incom FD pays an annual dividend of $1.81 per share and has a dividend yield of 14.1%. Garrison Capital pays an annual dividend of $0.92 per share and has a dividend yield of 12.3%. Garrison Capital pays out 91.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Institutional & Insider Ownership

26.7% of Garrison Capital shares are held by institutional investors. 6.4% of Garrison Capital shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Stone Harbor Emerging Mkt Total Incom FD and Garrison Capital’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Stone Harbor Emerging Mkt Total Incom FD N/A N/A N/A
Garrison Capital -4.06% 9.02% 3.57%

Analyst Ratings

This is a breakdown of recent recommendations for Stone Harbor Emerging Mkt Total Incom FD and Garrison Capital, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Stone Harbor Emerging Mkt Total Incom FD 0 0 0 0 N/A
Garrison Capital 0 0 2 0 3.00

Garrison Capital has a consensus target price of $11.00, indicating a potential upside of 46.67%. Given Garrison Capital’s higher probable upside, analysts plainly believe Garrison Capital is more favorable than Stone Harbor Emerging Mkt Total Incom FD.

Earnings and Valuation

This table compares Stone Harbor Emerging Mkt Total Incom FD and Garrison Capital’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Stone Harbor Emerging Mkt Total Incom FD N/A N/A N/A N/A N/A
Garrison Capital $38.78 million 3.10 -$1.57 million $1.01 7.43

Stone Harbor Emerging Mkt Total Incom FD has higher earnings, but lower revenue than Garrison Capital.

Summary

Garrison Capital beats Stone Harbor Emerging Mkt Total Incom FD on 7 of the 10 factors compared between the two stocks.

About Stone Harbor Emerging Mkt Total Incom FD

Stone Harbor Emerging Markets Total Income Fund is a closed ended balanced mutual fund launched and managed by Stone Harbor Investment Partners LP. The fund invests in public equity and fixed income securities of emerging countries across the globe. Stone Harbor Emerging Markets Total Income Fund was formed on October 25, 2012 and is domiciled in the United States.

About Garrison Capital

Garrison Capital Inc. is a business development company specializing in investments primarily in the debt and equity of middle market companies. It seeks to invest in first lien senior secured loans, second lien senior secured loans, “one-stop” senior secured or “unitranche” loans, subordinated or mezzanine loans, unsecured consumer loans and to a lesser extent, selected equity co-investments in middle-market companies, warrants and minority equity securities in United States middle-market companies. The fund focuses on consumer loans, capital market activities, traditional direct lending but at times may purchase loans in the secondary market or make special situation investments. It seeks to invest between $5 million and $25 million in equity and between $10 million and $25 million in debt per transaction primarily in debt securities and loans with annual EBITDA between $5 million and $30 million, annual revenue between $50 million and $200 million. Its investments typically range in maturity from one to six years.

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