Head to Head Review: TPG Specialty Lending (TSLX) vs. Its Peers

TPG Specialty Lending (NYSE: TSLX) is one of 587 publicly-traded companies in the “Closed End Funds” industry, but how does it contrast to its competitors? We will compare TPG Specialty Lending to similar companies based on the strength of its analyst recommendations, institutional ownership, dividends, risk, earnings, valuation and profitability.

Risk and Volatility

TPG Specialty Lending has a beta of 0.69, indicating that its share price is 31% less volatile than the S&P 500. Comparatively, TPG Specialty Lending’s competitors have a beta of 0.56, indicating that their average share price is 44% less volatile than the S&P 500.

Earnings & Valuation

This table compares TPG Specialty Lending and its competitors gross revenue, earnings per share and valuation.

Gross Revenue NetIncome Price/Earnings Ratio
TPG Specialty Lending $192.41 million $107.33 million 9.36
TPG Specialty Lending Competitors $238.79 million $43.51 million 255.21

TPG Specialty Lending’s competitors have higher revenue, but lower earnings than TPG Specialty Lending. TPG Specialty Lending 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.

Dividends

TPG Specialty Lending pays an annual dividend of $1.56 per share and has a dividend yield of 7.7%. TPG Specialty Lending pays out 71.9% of its earnings in the form of a dividend. As a group, “Closed End Funds” companies pay a dividend yield of 8.8% and pay out 89.4% of their earnings in the form of a dividend.

Analyst Ratings

This is a breakdown of current recommendations and price targets for TPG Specialty Lending and its competitors, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TPG Specialty Lending 0 2 2 0 2.50
TPG Specialty Lending Competitors 217 1547 1890 31 2.47

TPG Specialty Lending presently has a consensus target price of $20.25, suggesting a potential downside of 0.30%. As a group, “Closed End Funds” companies have a potential upside of 42.50%. Given TPG Specialty Lending’s competitors higher possible upside, analysts plainly believe TPG Specialty Lending has less favorable growth aspects than its competitors.

Profitability

This table compares TPG Specialty Lending and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
TPG Specialty Lending 60.77% 12.68% 7.41%
TPG Specialty Lending Competitors -49.35% 6.78% 5.22%

Insider & Institutional Ownership

63.0% of TPG Specialty Lending shares are owned by institutional investors. Comparatively, 24.0% of shares of all “Closed End Funds” companies are owned by institutional investors. 4.8% of TPG Specialty Lending shares are owned by company insiders. Comparatively, 5.1% of shares of all “Closed End Funds” companies are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

TPG Specialty Lending beats its competitors on 8 of the 15 factors compared.

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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