Harvest Capital Credit (NASDAQ: HCAP) and MCG Capital (NASDAQ:MCGC) are both closed end funds companies, but which is the superior stock? We will compare the two businesses based on the strength of their profitability, earnings, institutional ownership, analyst recommendations, risk, dividends and valuation.
Institutional & Insider Ownership
5.7% of Harvest Capital Credit shares are held by institutional investors. 9.5% of Harvest Capital Credit shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
This table compares Harvest Capital Credit and MCG Capital’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Harvest Capital Credit||14.76%||11.04%||6.80%|
This is a breakdown of recent ratings and recommmendations for Harvest Capital Credit and MCG Capital, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Harvest Capital Credit||0||1||0||0||2.00|
Harvest Capital Credit presently has a consensus price target of $13.50, suggesting a potential upside of 21.78%.
Harvest Capital Credit pays an annual dividend of $1.35 per share and has a dividend yield of 12.2%. MCG Capital does not pay a dividend. Harvest Capital Credit pays out 287.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Valuation and Earnings
This table compares Harvest Capital Credit and MCG Capital’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Harvest Capital Credit||$20.89 million||3.44||$6.00 million||$0.47||23.59|
Harvest Capital Credit has higher revenue and earnings than MCG Capital. MCG Capital is trading at a lower price-to-earnings ratio than Harvest Capital Credit, indicating that it is currently the more affordable of the two stocks.
Harvest Capital Credit beats MCG Capital on 8 of the 9 factors compared between the two stocks.
Harvest Capital Credit Company Profile
Harvest Capital Credit Corporation is an externally managed, closed-end, non-diversified management investment company. The Company operates as a business development company and provides customized financing solutions for small to mid-sized companies. Its investment objective is to generate both current income and capital appreciation by making direct investments in the form of subordinated debt, senior debt, and to a lesser extent, minority equity investments in privately-held the United States small to mid-sized companies. Its investment portfolio includes over 56.8% of senior secured term loans, 40.8% of junior secured term loans, 1.3% of equity investments and 1.1% of collateralized loan obligation (CLO) equity at fair value. It may also invest in other investments, such as loans to larger, publicly-traded companies, high-yield bonds and distressed debt securities. It may also invest in debt and equity securities issued by CLO funds. HCAP Advisors LLC is its investment adviser.
MCG Capital Company Profile
PFLT Funding II, LLC, formerly MCG Capital Corporation, is a United States-based company. The Company provides products and services.
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