Head-To-Head Comparison: PennantPark Floating Rate Capital (PFLT) vs. Its Rivals

PennantPark Floating Rate Capital (NASDAQ: PFLT) is one of 585 publicly-traded companies in the “Closed End Funds” industry, but how does it compare to its competitors? We will compare PennantPark Floating Rate Capital to related businesses based on the strength of its institutional ownership, profitability, earnings, dividends, valuation, risk and analyst recommendations.

Profitability

This table compares PennantPark Floating Rate Capital and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
PennantPark Floating Rate Capital 73.28% 7.26% 4.15%
PennantPark Floating Rate Capital Competitors -47.98% 6.81% 5.24%

Risk & Volatility

PennantPark Floating Rate Capital has a beta of 0.6, meaning that its share price is 40% less volatile than the S&P 500. Comparatively, PennantPark Floating Rate Capital’s competitors have a beta of 0.55, meaning that their average share price is 45% less volatile than the S&P 500.

Insider and Institutional Ownership

30.4% of PennantPark Floating Rate Capital shares are owned by institutional investors. Comparatively, 23.2% of shares of all “Closed End Funds” companies are owned by institutional investors. 1.2% of PennantPark Floating Rate Capital shares are owned by company insiders. Comparatively, 3.5% of shares of all “Closed End Funds” companies are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Dividends

PennantPark Floating Rate Capital pays an annual dividend of $1.14 per share and has a dividend yield of 8.3%. PennantPark Floating Rate Capital pays out 78.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Closed End Funds” companies pay a dividend yield of 7.9% and pay out 147.1% of their earnings in the form of a dividend. PennantPark Floating Rate Capital is clearly a better dividend stock than its competitors, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of current ratings and price targets for PennantPark Floating Rate Capital and its competitors, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
PennantPark Floating Rate Capital 0 1 4 0 2.80
PennantPark Floating Rate Capital Competitors 202 1227 1442 15 2.44

PennantPark Floating Rate Capital presently has a consensus price target of $14.90, indicating a potential upside of 8.13%. As a group, “Closed End Funds” companies have a potential upside of 56.88%. Given PennantPark Floating Rate Capital’s competitors higher probable upside, analysts clearly believe PennantPark Floating Rate Capital has less favorable growth aspects than its competitors.

Earnings and Valuation

This table compares PennantPark Floating Rate Capital and its competitors revenue, earnings per share and valuation.

Gross Revenue NetIncome Price/Earnings Ratio
PennantPark Floating Rate Capital $46.30 million $33.49 million 9.44
PennantPark Floating Rate Capital Competitors $118.53 million $49.80 million 133.23

PennantPark Floating Rate Capital’s competitors have higher revenue and earnings than PennantPark Floating Rate Capital. PennantPark Floating Rate Capital is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Summary

PennantPark Floating Rate Capital beats its competitors on 8 of the 15 factors compared.

PennantPark Floating Rate Capital Company Profile

PennantPark Floating Rate Capital Ltd. is a business development company. The Company is a closed-end, externally managed and non-diversified investment company. Its investment objectives are to generate current income and capital appreciation by investing primarily in floating rate loans and other investments made to the United States middle-market companies. It provides first lien secured debt and other opportunistic financings (senior notes, second lien, mezzanine, private high yield debt, and preferred and common stock) to middle market sponsors and companies. Its investments may include equity features, such as direct investments in the equity securities of borrowers or warrants or options to buy a minority interest in a portfolio company. It has investments in various sectors, including aerospace and defense; consumer services; healthcare and pharmaceuticals, and others. Its investment activities are managed by the investment advisor, PennantPark Investment Advisers, LLC.

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