Stellus Capital Investment Corporation (NYSE: SCM) is one of 576 publicly-traded companies in the “Closed End Funds” industry, but how does it compare to its competitors? We will compare Stellus Capital Investment Corporation to related businesses based on the strength of its analyst recommendations, institutional ownership, risk, dividends, earnings, valuation and profitability.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Stellus Capital Investment Corporation and its competitors, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Stellus Capital Investment Corporation 0 1 3 0 2.75
Stellus Capital Investment Corporation Competitors 196 1200 1418 14 2.44

Stellus Capital Investment Corporation presently has a consensus price target of $14.83, suggesting a potential upside of 4.90%. As a group, “Closed End Funds” companies have a potential upside of 46.16%. Given Stellus Capital Investment Corporation’s competitors higher probable upside, analysts clearly believe Stellus Capital Investment Corporation has less favorable growth aspects than its competitors.

Earnings & Valuation

This table compares Stellus Capital Investment Corporation and its competitors top-line revenue, earnings per share and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Stellus Capital Investment Corporation N/A N/A 6.67
Stellus Capital Investment Corporation Competitors $57.58 million $38.86 million 0.07

Stellus Capital Investment Corporation’s competitors have higher revenue and earnings than Stellus Capital Investment Corporation. Stellus Capital Investment Corporation is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Profitability

This table compares Stellus Capital Investment Corporation and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Stellus Capital Investment Corporation 68.17% 10.06% 5.01%
Stellus Capital Investment Corporation Competitors -47.82% 6.85% 5.29%

Volatility and Risk

Stellus Capital Investment Corporation has a beta of 0.56, indicating that its share price is 44% less volatile than the S&P 500. Comparatively, Stellus Capital Investment Corporation’s competitors have a beta of 0.55, indicating that their average share price is 45% less volatile than the S&P 500.

Institutional and Insider Ownership

26.5% of Stellus Capital Investment Corporation shares are held by institutional investors. Comparatively, 23.2% of shares of all “Closed End Funds” companies are held by institutional investors. 4.2% of Stellus Capital Investment Corporation shares are held by company insiders. Comparatively, 3.5% of shares of all “Closed End Funds” companies are held 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.

Dividends

Stellus Capital Investment Corporation pays an annual dividend of $1.36 per share and has a dividend yield of 9.6%. Stellus Capital Investment Corporation pays out 64.2% of its earnings in the form of a dividend. As a group, “Closed End Funds” companies pay a dividend yield of 8.8% and pay out 87.0% of their earnings in the form of a dividend. Stellus Capital Investment Corporation is clearly a better dividend stock than its competitors, given its higher yield and lower payout ratio.

Summary

Stellus Capital Investment Corporation beats its competitors on 9 of the 13 factors compared.

About Stellus Capital Investment Corporation

Stellus Capital Investment Corporation is a closed-end, non-diversified management investment company. The Company originates and invests primarily in private middle-market companies through first lien, second lien, unitranche and mezzanine debt financing, with corresponding equity co-investments. The Company’s investment objective is to maximize the total return to its stockholders in the form of current income and capital appreciation. It invests in various sectors, such as business services, energy, general industrial, government services, healthcare, software and specialty finance. Its investment advisor is Stellus Capital Management, LLC (Stellus Capital Management). Stellus Capital Management is responsible for analyzing investment opportunities, conducting research and performing due diligence on investments, negotiating and structuring the Company’s investments, originating prospective investments, and monitoring its investments and portfolio companies on an ongoing basis.

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