Helios Advantage Income Fund (NYSE: HAV) and WhiteHorse Finance (NASDAQ:WHF) are both financials companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, institutional ownership, risk, earnings, profitability, valuation and analyst recommendations.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Helios Advantage Income Fund and WhiteHorse Finance, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Helios Advantage Income Fund 0 0 0 0 N/A
WhiteHorse Finance 1 2 1 0 2.00

WhiteHorse Finance has a consensus price target of $15.00, indicating a potential upside of 24.28%.

Profitability

This table compares Helios Advantage Income Fund and WhiteHorse Finance’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Helios Advantage Income Fund N/A N/A N/A
WhiteHorse Finance 64.58% 9.69% 5.54%

Dividends

WhiteHorse Finance pays an annual dividend of $1.42 per share and has a dividend yield of 11.8%. Helios Advantage Income Fund does not pay a dividend. WhiteHorse Finance pays out 76.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Valuation and Earnings

This table compares Helios Advantage Income Fund and WhiteHorse Finance’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Helios Advantage Income Fund N/A N/A N/A N/A N/A
WhiteHorse Finance $53.85 million 4.60 $31.32 million $1.86 6.49

WhiteHorse Finance has higher revenue and earnings than Helios Advantage Income Fund.

Institutional & Insider Ownership

9.3% of WhiteHorse Finance shares are owned by institutional investors. 1.4% of WhiteHorse Finance shares are owned by company 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.

Summary

WhiteHorse Finance beats Helios Advantage Income Fund on 8 of the 9 factors compared between the two stocks.

Helios Advantage Income Fund Company Profile

Helios Advantage Income Fund, Inc. (the Fund) is a diversified, closed-end management investment company. The Fund seeks a high level of current income. The Fund seeks capital growth as a secondary investment objective. It invests a majority of its total assets in below-investment-grade debt securities. The Fund also may invest in investment grade debt securities, up to 15% of its total assets in foreign debt and foreign equity securities, and up to 25% of its total assets in domestic equity securities, including common and preferred stocks. The Fund invests in a range of below-investment-grade debt securities, including corporate bonds, mortgage-backed and asset-backed securities, and municipal and foreign government obligations, as well as securities of companies in bankruptcy reorganization proceedings or otherwise in the process of debt restructuring. The Fund’s investment advisor is Brookfield Investment Management Inc.

WhiteHorse Finance Company Profile

WhiteHorse Finance, Inc. is a non-diversified, closed-end management investment company. The Company is a direct lender targeting debt investments in privately held, small-cap companies located in the United States. The Company’s investment objective is to generate attractive risk-adjusted returns primarily by originating and investing in senior secured loans, including first lien and second lien facilities, to performing small-cap companies across a range of industries that typically carry a floating interest rate based on the London Interbank Offered Rate (LIBOR) and have a term of 3 to 6 years. The Company may also make investments at other levels of a company’s capital structure, including mezzanine loans or equity interests. The Company also may receive warrants to purchase common stock in connection with its debt investments. Its investment advisor is H.I.G. WhiteHorse Advisers, LLC.

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