Financial Analysis: Arlington Asset Investment (NYSE:AI) and InvestcorpCreditManagementBDCInc . (NYSE:ICMB)

Arlington Asset Investment (NYSE:AI) and InvestcorpCreditManagementBDCInc . (NASDAQ:ICMB) are both small-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, earnings, institutional ownership, valuation, risk, analyst recommendations and dividends.

Earnings & Valuation

This table compares Arlington Asset Investment and InvestcorpCreditManagementBDCInc .’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Arlington Asset Investment $130.95 million 1.64 -$91.79 million $2.06 2.85
InvestcorpCreditManagementBDCInc . $34.40 million 2.57 -$14.54 million $0.99 6.56

InvestcorpCreditManagementBDCInc . has lower revenue, but higher earnings than Arlington Asset Investment. Arlington Asset Investment is trading at a lower price-to-earnings ratio than InvestcorpCreditManagementBDCInc ., indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current recommendations and price targets for Arlington Asset Investment and InvestcorpCreditManagementBDCInc ., as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Arlington Asset Investment 0 2 1 0 2.33
InvestcorpCreditManagementBDCInc . 0 0 1 0 3.00

Arlington Asset Investment currently has a consensus target price of $14.00, suggesting a potential upside of 138.50%. InvestcorpCreditManagementBDCInc . has a consensus target price of $9.00, suggesting a potential upside of 38.67%. Given Arlington Asset Investment’s higher probable upside, research analysts plainly believe Arlington Asset Investment is more favorable than InvestcorpCreditManagementBDCInc ..

Profitability

This table compares Arlington Asset Investment and InvestcorpCreditManagementBDCInc .’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Arlington Asset Investment -27.63% 15.96% 1.08%
InvestcorpCreditManagementBDCInc . -42.28% 8.70% 4.15%

Institutional & Insider Ownership

45.1% of Arlington Asset Investment shares are held by institutional investors. Comparatively, 44.4% of InvestcorpCreditManagementBDCInc . shares are held by institutional investors. 2.2% of Arlington Asset Investment shares are held by insiders. Comparatively, 1.7% of InvestcorpCreditManagementBDCInc . shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Volatility and Risk

Arlington Asset Investment has a beta of 1.01, suggesting that its share price is 1% more volatile than the S&P 500. Comparatively, InvestcorpCreditManagementBDCInc . has a beta of 1.29, suggesting that its share price is 29% more volatile than the S&P 500.

Dividends

Arlington Asset Investment pays an annual dividend of $0.90 per share and has a dividend yield of 15.3%. InvestcorpCreditManagementBDCInc . pays an annual dividend of $1.00 per share and has a dividend yield of 15.4%. Arlington Asset Investment pays out 43.7% of its earnings in the form of a dividend. InvestcorpCreditManagementBDCInc . pays out 101.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

Arlington Asset Investment beats InvestcorpCreditManagementBDCInc . on 8 of the 15 factors compared between the two stocks.

About Arlington Asset Investment

Arlington Asset Investment Corp. (NYSE: AI) is a principal investment firm that currently invests primarily in mortgage-related and other assets. The Company is headquartered in the Washington, D.C. metropolitan area. For more information, please visit www.arlingtonasset.com.

About InvestcorpCreditManagementBDCInc .

CM Finance Inc. is a business development company specializing in loan, mezzanine, middle market, growth capital, and recapitalization investments. The fund typically invests in United States and Europe. Within United States, the fund seeks to invest in Midatlantic, Midwest, Northeast, Southeast, and West Coast regions. The fund primarily invests in cable and satellites; consumer services; healthcare equipment and services; industrials; information technology; telecommunication services; and utilities sectors. The fund seeks to invest in companies with EBITDA more than $15 million. The fund is based in New York, New York.

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