Main Street Capital (NYSE:MAIN) & Bloomin’ Brands (NYSE:BLMN) Head to Head Contrast

Main Street Capital (NYSE:MAIN) and Bloomin’ Brands (NASDAQ:BLMN) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, institutional ownership, valuation, profitability, analyst recommendations, earnings and dividends.

Profitability

This table compares Main Street Capital and Bloomin’ Brands’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Main Street Capital 65.74% 10.57% 6.18%
Bloomin’ Brands 2.62% 105.54% 4.67%

Valuation & Earnings

This table compares Main Street Capital and Bloomin’ Brands’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Main Street Capital $233.35 million 11.72 $168.21 million $2.60 16.67
Bloomin’ Brands $4.13 billion 0.33 $107.10 million $1.50 10.53

Main Street Capital has higher earnings, but lower revenue than Bloomin’ Brands. Bloomin’ Brands is trading at a lower price-to-earnings ratio than Main Street Capital, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Main Street Capital and Bloomin’ Brands, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Main Street Capital 0 2 2 0 2.50
Bloomin’ Brands 2 2 9 0 2.54

Main Street Capital currently has a consensus target price of $39.25, indicating a potential downside of 9.42%. Bloomin’ Brands has a consensus target price of $21.40, indicating a potential upside of 35.53%. Given Bloomin’ Brands’ stronger consensus rating and higher probable upside, analysts plainly believe Bloomin’ Brands is more favorable than Main Street Capital.

Volatility & Risk

Main Street Capital has a beta of 0.85, suggesting that its stock price is 15% less volatile than the S&P 500. Comparatively, Bloomin’ Brands has a beta of 0.23, suggesting that its stock price is 77% less volatile than the S&P 500.

Dividends

Main Street Capital pays an annual dividend of $2.46 per share and has a dividend yield of 5.7%. Bloomin’ Brands pays an annual dividend of $0.40 per share and has a dividend yield of 2.5%. Main Street Capital pays out 94.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Bloomin’ Brands pays out 26.7% of its earnings in the form of a dividend. Main Street Capital has raised its dividend for 8 consecutive years and Bloomin’ Brands has raised its dividend for 3 consecutive years. Main Street Capital is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

21.7% of Main Street Capital shares are held by institutional investors. Comparatively, 94.5% of Bloomin’ Brands shares are held by institutional investors. 5.4% of Main Street Capital shares are held by insiders. Comparatively, 4.4% of Bloomin’ Brands shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

Main Street Capital beats Bloomin’ Brands on 10 of the 17 factors compared between the two stocks.

Main Street Capital Company Profile

Main Street Capital Corporation is a business development company specializing in long- term equity and debt investments in small and lower middle market companies. The firm focuses on investments in, subordinated loans, private equity, venture debt, mezzanine investments, mature, mid venture, industry consolidation, later stage, late venture, emerging growth, management buyouts, change of control transactions, ownership transitions, recapitalizations, strategic acquisitions, refinancing, business expansion capital, growth financings, family estate planning, and other growth initiatives primarily for later stage businesses. It invests in consumer discretionary, consumer staples, energy, healthcare, industrials, information technology, manufacturing, media, materials, telecommunication services, and utilities sectors. It does not seek to invest in start-up companies or companies with speculative business plans. It seeks to invest in traditional or basic businesses. The firm primarily invests in companies based in the Southern, South Central, and Southwestern regions of the United States but also considers other domestic investment opportunities. It typically invests between $2 million and $75 million in equity and $5 million to $50 million in debt, revenue between $10 million and $150 million, enterprise value between $3 million and $50 million, and EBITDA between $1 million and $20 million. The firm seeks to charge a fixed interest rate between 12 percent and 14 percent, payable in cash, in case of its mezzanine loan investments. The firm typically invests in the form of term debt with equity participation and/or direct equity investments. It prefers to maintain fully diluted minority and majority equity positions in its portfolio companies of 5 percent to 50 percent, and may have controlling interests in some instances. The firm also co-invests with other investment firms. It seeks to exit its debt investments through the repayment of the investment from internally generated cash flow and/or refinancing within a period of three to seven years. It participates in warrants, PIK (Payment in Kind) interest, convertible securities, junior secured or unsecured, senior secured debt, unitranche debt, equity related, common equity, and preferred equity. Main Street Capital Corporation was incorporated on March 9, 2007 and is based at Houston, Texas.

Bloomin’ Brands Company Profile

Bloomin' Brands, Inc., through its subsidiaries, owns and operates casual, upscale casual, and fine dining restaurants in the United States and internationally. The company operates through two segments, U.S. and International. Its restaurant portfolio has four concepts, including Outback Steakhouse, a casual steakhouse restaurant; Carrabba's Italian Grill, a casual Italian restaurant; Bonefish Grill, an upscale casual seafood restaurant; and Fleming's Prime Steakhouse & Wine Bar, a contemporary steakhouse. As of December 31, 2017, the company owned and operated 1,075 restaurants and franchised 165 restaurants. Bloomin' Brands, Inc. was incorporated in 2006 and is headquartered in Tampa, Florida.

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