Liberty All-Star Equity Fund (NYSE: USA) and TPG Specialty Lending (NYSE:TSLX) are both small-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, institutional ownership, profitability, dividends, analyst recommendations, risk and valuation.
This is a summary of recent ratings and target prices for Liberty All-Star Equity Fund and TPG Specialty Lending, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Liberty All-Star Equity Fund||0||1||2||0||2.67|
|TPG Specialty Lending||0||2||2||0||2.50|
Liberty All-Star Equity Fund currently has a consensus price target of $44.50, indicating a potential upside of 697.49%. TPG Specialty Lending has a consensus price target of $20.25, indicating a potential downside of 4.84%. Given Liberty All-Star Equity Fund’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Liberty All-Star Equity Fund is more favorable than TPG Specialty Lending.
Institutional & Insider Ownership
31.1% of Liberty All-Star Equity Fund shares are owned by institutional investors. Comparatively, 64.4% of TPG Specialty Lending shares are owned by institutional investors. 0.1% of Liberty All-Star Equity Fund shares are owned by insiders. Comparatively, 4.9% of TPG Specialty Lending shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Risk and Volatility
Liberty All-Star Equity Fund has a beta of 1.22, meaning that its share price is 22% more volatile than the S&P 500. Comparatively, TPG Specialty Lending has a beta of 0.71, meaning that its share price is 29% less volatile than the S&P 500.
Valuation and Earnings
This table compares Liberty All-Star Equity Fund and TPG Specialty Lending’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Liberty All-Star Equity Fund||N/A||N/A||N/A||N/A||N/A|
|TPG Specialty Lending||N/A||N/A||N/A||$2.17||9.81|
Liberty All-Star Equity Fund pays an annual dividend of $0.13 per share and has a dividend yield of 2.3%. TPG Specialty Lending pays an annual dividend of $1.56 per share and has a dividend yield of 7.3%. TPG Specialty Lending pays out 71.9% of its earnings in the form of a dividend.
This table compares Liberty All-Star Equity Fund and TPG Specialty Lending’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Liberty All-Star Equity Fund||N/A||N/A||N/A|
|TPG Specialty Lending||60.77%||12.68%||7.41%|
TPG Specialty Lending beats Liberty All-Star Equity Fund on 6 of the 10 factors compared between the two stocks.
Liberty All-Star Equity Fund Company Profile
Liberty All-Star Equity Fund is a diversified, closed-end management investment fund. The Fund seeks total investment return comprising long-term capital appreciation and current income through investing primarily in a diversified portfolio of equity securities. It allocates its portfolio assets on an approximately equal basis among several independent investment management organizations having various investment styles recommended and monitored by its investment advisor. It invests at least 80% of its net assets in a diversified portfolio of equity securities. The Fund invests in various sectors, including financials, information technology, healthcare, consumer discretionary, consumer staples, industrials, energy, materials, real estate, utilities and telecommunication services. Its investment managers invest primarily for pension funds, endowments, foundations and other institutions. The Fund’s investment advisor is ALPS Advisors, Inc.
TPG Specialty Lending Company Profile
TPG Specialty Lending, Inc. is an externally managed, closed-end, non-diversified management investment company. The Company is a specialty finance company focused on lending to middle-market companies. It seeks to generate current income primarily in the United States-domiciled middle-market companies through direct originations of senior secured loans and originations of mezzanine and unsecured loans and investments in corporate bonds and equity securities. The Company invests in first-lien debt, second-lien debt, mezzanine and unsecured debt and equity and other investments. Its first-lien debt may include standalone first-lien loans; last out first-lien loans; unitranche loans and secured corporate bonds. Its second-lien debt may include secured loans and secured corporate bonds, with a secondary priority behind first-lien debt. As of December 31, 2016, the Company’s portfolio was invested across 19 different industries. The Company’s investment advisor is TSL Advisers, LLC.
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