Morgan Stanley Direct Lending Fund (NYSE:MSDL – Get Free Report) and Netcapital (NASDAQ:NCPL – Get Free Report) are both small-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, earnings, analyst recommendations, profitability, institutional ownership, valuation and risk.
Earnings & Valuation
This table compares Morgan Stanley Direct Lending Fund and Netcapital”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Morgan Stanley Direct Lending Fund | $397.29 million | 3.03 | $122.09 million | $0.69 | 20.76 |
| Netcapital | $870,000.00 | 11.46 | -$28.30 million | ($15.49) | -0.08 |
Risk and Volatility
Morgan Stanley Direct Lending Fund has a beta of 0.54, indicating that its share price is 46% less volatile than the S&P 500. Comparatively, Netcapital has a beta of 2.52, indicating that its share price is 152% more volatile than the S&P 500.
Institutional & Insider Ownership
30.7% of Netcapital shares are held by institutional investors. 0.3% of Morgan Stanley Direct Lending Fund shares are held by company insiders. Comparatively, 4.9% of Netcapital shares are held 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.
Profitability
This table compares Morgan Stanley Direct Lending Fund and Netcapital’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Morgan Stanley Direct Lending Fund | 15.97% | 9.61% | 4.28% |
| Netcapital | -3,806.77% | -40.53% | -32.59% |
Analyst Ratings
This is a breakdown of current recommendations for Morgan Stanley Direct Lending Fund and Netcapital, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Morgan Stanley Direct Lending Fund | 0 | 6 | 1 | 0 | 2.14 |
| Netcapital | 1 | 0 | 0 | 0 | 1.00 |
Morgan Stanley Direct Lending Fund currently has a consensus target price of $15.50, indicating a potential upside of 8.20%. Given Morgan Stanley Direct Lending Fund’s stronger consensus rating and higher probable upside, research analysts clearly believe Morgan Stanley Direct Lending Fund is more favorable than Netcapital.
Summary
Morgan Stanley Direct Lending Fund beats Netcapital on 10 of the 14 factors compared between the two stocks.
About Morgan Stanley Direct Lending Fund
Morgan Stanley Direct Lending Fund is a business development company. It is a non-diversified, externally managed specialty finance company focused on lending to middle-market companies. Morgan Stanley Direct Lending Fund is based in NEW YORK.
About Netcapital
Netcapital Inc. operates as a fintech company. It offers Netcapital.com, an SEC-registered funding portal that enables private companies to raise capital online, as well as allows investors to invest from anywhere in the world. The company also provides various services, including automated onboarding process and filing of required regulatory documents; compliance review; custom-built offering page on its portal website; third party transfer agent and custodial services; and rolling closes which provides access to liquidity before final close date of offerings, as well as assistance with annual fillings and direct access to team for ongoing support. In addition, it offers advisor services, which includes incubation of technology start-ups; investors introduction; online marketing; website design and software development; message crafting including pitch decks, offering pages, and ad creation; strategic advice; and technology consulting services. Further, the company provides valuation services, such as business valuation, fairness and solvency opinions, ESOP feasibility and valuation, non-cash charitable contribution, economic analysis of damages, intellectual property appraisals, and compensation studies. Netcapital Inc. is based in Boston, Massachusetts.
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