Solar Senior Capital (NASDAQ: SUNS) and Liberty All-Star Equity Fund (NYSE:USA) are both small-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, risk, earnings, profitability, institutional ownership, dividends and analyst recommendations.
This is a summary of current ratings for Solar Senior Capital and Liberty All-Star Equity Fund, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Solar Senior Capital||0||0||0||0||N/A|
|Liberty All-Star Equity Fund||0||0||0||0||N/A|
Insider & Institutional Ownership
25.6% of Solar Senior Capital shares are owned by institutional investors. Comparatively, 21.0% of Liberty All-Star Equity Fund shares are owned by institutional investors. 5.6% of Solar Senior Capital shares are owned by insiders. Comparatively, 0.1% of Liberty All-Star Equity Fund shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Earnings and Valuation
This table compares Solar Senior Capital and Liberty All-Star Equity Fund’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Solar Senior Capital||$32.17 million||8.29||$23.38 million||$1.41||11.79|
|Liberty All-Star Equity Fund||N/A||N/A||N/A||N/A||N/A|
Solar Senior Capital has higher revenue and earnings than Liberty All-Star Equity Fund.
This table compares Solar Senior Capital and Liberty All-Star Equity Fund’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Solar Senior Capital||67.60%||8.38%||4.42%|
|Liberty All-Star Equity Fund||N/A||N/A||N/A|
Solar Senior Capital pays an annual dividend of $1.41 per share and has a dividend yield of 8.5%. Liberty All-Star Equity Fund pays an annual dividend of $0.17 per share and has a dividend yield of 2.6%. Solar Senior Capital pays out 100.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Volatility & Risk
Solar Senior Capital has a beta of 0.6, meaning that its stock price is 40% less volatile than the S&P 500. Comparatively, Liberty All-Star Equity Fund has a beta of 1.12, meaning that its stock price is 12% more volatile than the S&P 500.
Solar Senior Capital beats Liberty All-Star Equity Fund on 7 of the 9 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 Liberty All-Star Equity Fund
Liberty All Star Equity Fund is a closed-ended equity mutual fund launched and managed by ALPS Advisers, Inc. The fund is co-managed by Aristotle Capital Management, LLC, Pzena Investment Management, LLC, Delaware Investments Fund Advisers, Sustainable Growth Advisers, LP, and TCW Investment Management Company. It invests in the public equity markets of the United States. The fund seeks to invest in stocks of companies operating across diversified sectors. It primarily invests in value and growth stocks of large cap companies. The fund benchmarks the performance of its portfolio against the Lipper Large-Cap Core Mutual Fund Average, the Dow Jones Industrial Average, the NASDAQ Composite Index, and the S&P 500 Index. Liberty All Star Equity Fund was formed on October 31, 1986 and is domiciled in the United States.
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