Western Asset Municipal Hgh Incm Fnd (NYSE:MHF) and Solar Senior Capital (NASDAQ:SUNS) are both small-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, valuation, risk, analyst recommendations, earnings, dividends and profitability.
This is a breakdown of current ratings and target prices for Western Asset Municipal Hgh Incm Fnd and Solar Senior Capital, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Western Asset Municipal Hgh Incm Fnd||0||0||0||0||N/A|
|Solar Senior Capital||0||0||1||0||3.00|
Solar Senior Capital has a consensus price target of $18.50, suggesting a potential upside of 11.38%. Given Solar Senior Capital’s higher possible upside, analysts clearly believe Solar Senior Capital is more favorable than Western Asset Municipal Hgh Incm Fnd.
Valuation and Earnings
This table compares Western Asset Municipal Hgh Incm Fnd and Solar Senior Capital’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Western Asset Municipal Hgh Incm Fnd||N/A||N/A||N/A||N/A||N/A|
|Solar Senior Capital||$39.81 million||6.69||$13.81 million||$1.41||11.78|
Solar Senior Capital has higher revenue and earnings than Western Asset Municipal Hgh Incm Fnd.
This table compares Western Asset Municipal Hgh Incm Fnd and Solar Senior Capital’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Western Asset Municipal Hgh Incm Fnd||N/A||N/A||N/A|
|Solar Senior Capital||38.53%||8.50%||4.60%|
Volatility & Risk
Western Asset Municipal Hgh Incm Fnd has a beta of 0.23, meaning that its stock price is 77% less volatile than the S&P 500. Comparatively, Solar Senior Capital has a beta of 0.59, meaning that its stock price is 41% less volatile than the S&P 500.
Western Asset Municipal Hgh Incm Fnd pays an annual dividend of $0.31 per share and has a dividend yield of 4.1%. Solar Senior Capital pays an annual dividend of $1.41 per share and has a dividend yield of 8.5%. Solar Senior Capital pays out 100.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Solar Senior Capital has raised its dividend for 3 consecutive years. Solar Senior Capital is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Institutional and Insider Ownership
16.1% of Western Asset Municipal Hgh Incm Fnd shares are owned by institutional investors. Comparatively, 20.5% of Solar Senior Capital shares are owned by institutional investors. 5.7% of Solar Senior Capital shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Solar Senior Capital beats Western Asset Municipal Hgh Incm Fnd on 11 of the 12 factors compared between the two stocks.
Western Asset Municipal Hgh Incm Fnd Company Profile
Western Asset Municipal High Income Fund Inc. is a closed ended fixed income mutual fund launched and managed by Legg Mason Partners Fund Advisor, LLC. It is co-managed by Western Asset Management Company. The fund invests in the fixed income markets of the United States. It invests primarily in intermediate and long-term municipal debt securities issued by state and local governments including U.S. territories and possessions, political subdivisions, agencies and public authorities. The fund seeks to invest in investment grade debt securities rated in one of the four highest rating categories by a nationally recognized statistical rating organization to create its portfolio. It benchmarks the performance of its portfolio against the Lehman Brothers Municipal Bond Index. The fund was formerly known as Municipal High Income Fund Inc. Western Asset Municipal High Income Fund Inc. was formed on November 28, 1988 and is domiciled in the United States.
Solar Senior Capital Company Profile
Solar Senior Capital Ltd. is a business development company specializing in investments in leveraged, middle-market companies in the United States. The fund invests in the form of senior secured loans, including first lien, unitranche, and second lien debt instruments. It does not invest in start-up companies or companies having speculative business plans. The fund prefers debt investments between $5 million and $30 million in companies with EBITDA between $20 million and $60 million.
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