Financial Review: Ishares Nasdaq Biotechnology (IBB) & American Capital Senior Floating (ACSF)

Ishares Nasdaq Biotechnology (NASDAQ: IBB) and American Capital Senior Floating (NASDAQ:ACSF) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their risk, profitability, earnings, dividends, analyst recommendations, valuation and institutional ownership.

Dividends

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Ishares Nasdaq Biotechnology pays an annual dividend of $0.72 per share and has a dividend yield of 0.7%. American Capital Senior Floating pays an annual dividend of $1.26 per share and has a dividend yield of 11.4%. American Capital Senior Floating pays out 40.5% of its earnings in the form of a dividend.

Institutional & Insider Ownership

62.3% of Ishares Nasdaq Biotechnology shares are owned by institutional investors. Comparatively, 25.9% of American Capital Senior Floating shares are owned by institutional investors. 0.2% of American Capital Senior Floating shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Ishares Nasdaq Biotechnology and American Capital Senior Floating’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ishares Nasdaq Biotechnology N/A N/A N/A N/A N/A
American Capital Senior Floating $17.52 million 6.34 $5.70 million $3.11 3.57

American Capital Senior Floating has higher revenue and earnings than Ishares Nasdaq Biotechnology.

Volatility and Risk

Ishares Nasdaq Biotechnology has a beta of 1.38, suggesting that its stock price is 38% more volatile than the S&P 500. Comparatively, American Capital Senior Floating has a beta of 1.17, suggesting that its stock price is 17% more volatile than the S&P 500.

Profitability

This table compares Ishares Nasdaq Biotechnology and American Capital Senior Floating’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ishares Nasdaq Biotechnology N/A N/A N/A
American Capital Senior Floating 32.54% 4.51% 2.43%

Analyst Recommendations

This is a summary of recent recommendations for Ishares Nasdaq Biotechnology and American Capital Senior Floating, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ishares Nasdaq Biotechnology 0 0 0 0 N/A
American Capital Senior Floating 0 0 0 0 N/A

Summary

American Capital Senior Floating beats Ishares Nasdaq Biotechnology on 6 of the 9 factors compared between the two stocks.

Ishares Nasdaq Biotechnology Company Profile

iShares Nasdaq Biotechnology ETF (the Fund), formerly iShares Nasdaq Biotechnology Index Fund, is an exchange-traded fund (ETF). The Fund seeks investment results that correspond generally to the price and yield performance of the NASDAQ Biotechnology Index (the Index). The Index contains securities of NASDAQ listed companies that are classified according to the Industry Classification Benchmark as either biotechnology or pharmaceuticals, which also meet other eligibility criteria determined by NASDAQ. The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. Due to the use of representative sampling, the Fund may or may not hold all of the securities that are included in the Index. The Fund’s investment advisor is BlackRock Fund Advisors, which is indirectly owned by BlackRock, Inc.

American Capital Senior Floating Company Profile

American Capital Senior Floating, Ltd. is a non-diversified closed-end investment management company. The Company’s investment objective is to provide attractive, risk-adjusted returns over the long term primarily through current income while seeking to preserve its capital. It manages a leveraged portfolio composed primarily of diversified investments in first lien and second lien floating rate loans principally to the United States-based companies (collectively, Senior Floating Rate Loans or SFRLs), which are referred to as leveraged loans. It invests in equity tranches of collateralized loan obligations (CLOs), which are securitized vehicles collateralized primarily by SFRLs, and it may invest in debt tranches of CLOs. In addition, it may selectively invest in loans issued by middle market companies, mezzanine and unitranche loans and high yield bonds. It has over 80% of its assets in Senior Floating Rate Loans. The Company is managed by American Capital ACSF Management, LLC.

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