Fifth Street Senior Floating Rate Corp. (NASDAQ: OCSI) and Eaton Vance Floating-Rate Income Trust (NYSE:EFT) are both small-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, earnings, profitability, analyst recommendations, institutional ownership, valuation and dividends.

Institutional & Insider Ownership

21.4% of Fifth Street Senior Floating Rate Corp. shares are held by institutional investors. 0.4% of Fifth Street Senior Floating Rate Corp. shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Fifth Street Senior Floating Rate Corp. and Eaton Vance Floating-Rate Income Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Fifth Street Senior Floating Rate Corp. 29.89% 7.27% 3.83%
Eaton Vance Floating-Rate Income Trust N/A N/A N/A

Analyst Ratings

This is a summary of recent ratings and price targets for Fifth Street Senior Floating Rate Corp. and Eaton Vance Floating-Rate Income Trust, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Fifth Street Senior Floating Rate Corp. 0 2 0 0 2.00
Eaton Vance Floating-Rate Income Trust 0 0 0 0 N/A

Fifth Street Senior Floating Rate Corp. presently has a consensus target price of $9.25, suggesting a potential upside of 7.56%. Given Fifth Street Senior Floating Rate Corp.’s higher possible upside, analysts clearly believe Fifth Street Senior Floating Rate Corp. is more favorable than Eaton Vance Floating-Rate Income Trust.

Valuation & Earnings

This table compares Fifth Street Senior Floating Rate Corp. and Eaton Vance Floating-Rate Income Trust’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Fifth Street Senior Floating Rate Corp. $53.43 million 4.74 -$4.45 million $0.47 18.30
Eaton Vance Floating-Rate Income Trust N/A N/A N/A N/A N/A

Eaton Vance Floating-Rate Income Trust has higher revenue, but lower earnings than Fifth Street Senior Floating Rate Corp..

Dividends

Fifth Street Senior Floating Rate Corp. pays an annual dividend of $0.76 per share and has a dividend yield of 8.8%. Eaton Vance Floating-Rate Income Trust does not pay a dividend. Fifth Street Senior Floating Rate Corp. pays out 161.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Risk and Volatility

Fifth Street Senior Floating Rate Corp. has a beta of 0.34, meaning that its stock price is 66% less volatile than the S&P 500. Comparatively, Eaton Vance Floating-Rate Income Trust has a beta of 0.4, meaning that its stock price is 60% less volatile than the S&P 500.

Summary

Fifth Street Senior Floating Rate Corp. beats Eaton Vance Floating-Rate Income Trust on 8 of the 10 factors compared between the two stocks.

Fifth Street Senior Floating Rate Corp. Company Profile

Oaktree Strategic Income Corporation, formerly Fifth Street Senior Floating Rate Corp., is a closed-end, non-diversified management investment company. The Company operates as a specialty finance company. The Company’s investment objective is to maximize its portfolio’s total return by generating current income from its debt investments while seeking to preserve its capital. The Company invests in senior secured loans, including first lien, unitranche and second lien debt instruments. The Company may also invest in unsecured loans, including subordinated loans, issued by private middle market companies, and senior and subordinated loans issued by public companies and equity investments. The senior loans that the Company targets have final maturities of 4 to 7 years. The Company seeks to invest in senior loans made primarily to private middle market companies. The Company‚Äôs investment advisor is Oaktree Capital Management, L.P.

Eaton Vance Floating-Rate Income Trust Company Profile

Eaton Vance Floating-Rate Income Trust (the Trust) is a diversified, closed-end management investment company. The Trust’s investment objective is to provide a high level of current income. The Trust will, as a secondary objective, also seek preservation of capital to the extent consistent with its primary goal of high current income. Normally, the Trust invests approximately 80% of its total assets in senior loans of domestic and foreign borrowers that are denominated in the United States dollars, euros, British pounds, Swiss francs, Canadian dollars and Australian dollars. The Trust invests in a range of sectors, including healthcare, electronics/electrical, business equipment and services, retailers (except food and drug), chemicals and plastics, food products, oil and gas, lodging and casinos, insurance, and leisure goods/activities/movies. Eaton Vance Management is the investment advisor of the Trust.

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