Head-To-Head Analysis: Alcentra Capital Corp. (ABDC) vs. Its Peers

Alcentra Capital Corp. (NASDAQ: ABDC) is one of 586 public companies in the “Closed End Funds” industry, but how does it compare to its peers? We will compare Alcentra Capital Corp. to related companies based on the strength of its risk, analyst recommendations, profitability, earnings, valuation, institutional ownership and dividends.

Insider & Institutional Ownership

31.8% of Alcentra Capital Corp. shares are held by institutional investors. Comparatively, 23.2% of shares of all “Closed End Funds” companies are held by institutional investors. 5.0% of Alcentra Capital Corp. shares are held by company insiders. Comparatively, 3.5% of shares of all “Closed End Funds” companies are held 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.

Profitability

This table compares Alcentra Capital Corp. and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Alcentra Capital Corp. -2.77% 11.13% 6.86%
Alcentra Capital Corp. Competitors -49.63% 6.82% 5.25%

Risk and Volatility

Alcentra Capital Corp. has a beta of 0.68, suggesting that its share price is 32% less volatile than the S&P 500. Comparatively, Alcentra Capital Corp.’s peers have a beta of 0.55, suggesting that their average share price is 45% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings for Alcentra Capital Corp. and its peers, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Alcentra Capital Corp. 0 3 2 0 2.40
Alcentra Capital Corp. Competitors 202 1230 1449 15 2.44

Alcentra Capital Corp. currently has a consensus target price of $13.50, indicating a potential upside of 52.71%. As a group, “Closed End Funds” companies have a potential upside of 97.38%. Given Alcentra Capital Corp.’s peers stronger consensus rating and higher probable upside, analysts clearly believe Alcentra Capital Corp. has less favorable growth aspects than its peers.

Dividends

Alcentra Capital Corp. pays an annual dividend of $1.36 per share and has a dividend yield of 15.4%. Alcentra Capital Corp. pays out -1,700.0% of its earnings in the form of a dividend. As a group, “Closed End Funds” companies pay a dividend yield of 8.9% and pay out 88.3% of their earnings in the form of a dividend. Alcentra Capital Corp. is clearly a better dividend stock than its peers, given its higher yield and lower payout ratio.

Valuation & Earnings

This table compares Alcentra Capital Corp. and its peers revenue, earnings per share (EPS) and valuation.

Gross Revenue NetIncome Price/Earnings Ratio
Alcentra Capital Corp. $40.60 million $8.78 million -110.50
Alcentra Capital Corp. Competitors $118.53 million $49.80 million 121.31

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

Summary

Alcentra Capital Corp. beats its peers on 8 of the 15 factors compared.

Alcentra Capital Corp. Company Profile

Alcentra Capital Corporation is a specialty finance company that operates as a non-diversified, closed-end management investment company. The Company operates as a business development company and a regulated investment company. It provides customized debt and equity financing solutions to lower middle-market companies, which are companies having annual earnings, before interest, taxes, depreciation and amortization of between $5 million and $15 million, and/or revenues of between $10 million and $100 million. Its investments range in size from $5 million to $15 million. Its investment objective is to generate both current income and capital appreciation primarily by making direct investments in lower middle-market companies in the form of senior debt, unitranche, second lien, subordinated debt and, to a lesser extent, senior debt and minority equity investments. Its investment focus is to make loans to, and selected equity investments in, privately-held lower-middle-market companies.

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