Head to Head Review: Alcentra Capital Corp. (ABDC) and StoneCastle Financial Corp (BANX)
Alcentra Capital Corp. (NASDAQ: ABDC) and StoneCastle Financial Corp (NASDAQ:BANX) are both small-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their profitability, analyst recommendations, dividends, earnings, risk, valuation and institutional ownership.
This is a summary of current ratings and recommmendations for Alcentra Capital Corp. and StoneCastle Financial Corp, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Alcentra Capital Corp.||0||3||2||0||2.40|
|StoneCastle Financial Corp||0||0||4||0||3.00|
Alcentra Capital Corp. currently has a consensus target price of $13.50, suggesting a potential upside of 23.40%. StoneCastle Financial Corp has a consensus target price of $22.38, suggesting a potential upside of 9.36%. Given Alcentra Capital Corp.’s higher probable upside, equities analysts plainly believe Alcentra Capital Corp. is more favorable than StoneCastle Financial Corp.
This table compares Alcentra Capital Corp. and StoneCastle Financial Corp’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Alcentra Capital Corp.||-2.77%||11.13%||6.86%|
|StoneCastle Financial Corp||66.25%||N/A||N/A|
Alcentra Capital Corp. pays an annual dividend of $1.36 per share and has a dividend yield of 12.4%. StoneCastle Financial Corp pays an annual dividend of $1.48 per share and has a dividend yield of 7.2%. Alcentra Capital Corp. pays out -1,700.0% of its earnings in the form of a dividend. StoneCastle Financial Corp pays out 85.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Alcentra Capital Corp. is clearly the better dividend stock, given its higher yield and lower payout ratio.
Risk and Volatility
Alcentra Capital Corp. has a beta of 0.73, indicating that its stock price is 27% less volatile than the S&P 500. Comparatively, StoneCastle Financial Corp has a beta of 0.2, indicating that its stock price is 80% less volatile than the S&P 500.
Institutional & Insider Ownership
31.5% of Alcentra Capital Corp. shares are owned by institutional investors. Comparatively, 34.0% of StoneCastle Financial Corp shares are owned by institutional investors. 5.0% of Alcentra Capital Corp. shares are owned by insiders. Comparatively, 8.0% of StoneCastle Financial Corp shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Earnings & Valuation
This table compares Alcentra Capital Corp. and StoneCastle Financial Corp’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Alcentra Capital Corp.||N/A||N/A||N/A||($0.08)||-136.75|
|StoneCastle Financial Corp||N/A||N/A||N/A||$1.74||11.76|
Alcentra Capital Corp. is trading at a lower price-to-earnings ratio than StoneCastle Financial Corp, indicating that it is currently the more affordable of the two stocks.
StoneCastle Financial Corp beats Alcentra Capital Corp. on 7 of the 13 factors compared between the two stocks.
About Alcentra Capital Corp.
Alcentra Capital Corporation is a specialty finance company that operates as a non-diversified, closed-end management investment company. The Company operates as a business development company and a regulated investment company. It provides customized debt and equity financing solutions to lower middle-market companies, which are companies having annual earnings, before interest, taxes, depreciation and amortization of between $5 million and $15 million, and/or revenues of between $10 million and $100 million. Its investments range in size from $5 million to $15 million. Its investment objective is to generate both current income and capital appreciation primarily by making direct investments in lower middle-market companies in the form of senior debt, unitranche, second lien, subordinated debt and, to a lesser extent, senior debt and minority equity investments. Its investment focus is to make loans to, and selected equity investments in, privately-held lower-middle-market companies.
About StoneCastle Financial Corp
StoneCastle Financial Corp. is a non-diversified, closed-end management investment company. The Company’s primary investment objective is to provide stockholders with current income, and to a lesser extent capital appreciation. The Company generally invests in the senior debt, subordinated debt, preferred shares and common stock of community banks. The Company’s investment portfolio includes term loans, debt securities, trust preferred securities, preferred shares of credit securitization, preferred securities, convertible preferred stock, common stock, exchange traded fund, limited partnership interest and money market fund. The Company invests in bank issuers of various locations, such as California, Colorado, Florida, Georgia, Illinois, Kansas, Maine, Maryland, New Jersey, New York, Ohio, North Carolina, Oklahoma, South Carolina, Texas and West Virginia.
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