Strategic Global Government Fund Inc. Closed-End Fund (NYSE:RCS) and Apollo Investment (NASDAQ:AINV) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, dividends, risk, valuation, profitability, analyst recommendations and institutional ownership.

Dividends

Strategic Global Government Fund Inc. Closed-End Fund pays an annual dividend of $0.86 per share and has a dividend yield of 8.3%. Apollo Investment pays an annual dividend of $1.80 per share and has a dividend yield of 11.5%. Apollo Investment pays out 98.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Earnings & Valuation

This table compares Strategic Global Government Fund Inc. Closed-End Fund and Apollo Investment’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Strategic Global Government Fund Inc. Closed-End Fund N/A N/A N/A N/A N/A
Apollo Investment $259.29 million 4.19 $87.02 million $1.83 8.58

Apollo Investment has higher revenue and earnings than Strategic Global Government Fund Inc. Closed-End Fund.

Analyst Recommendations

This is a summary of current ratings and target prices for Strategic Global Government Fund Inc. Closed-End Fund and Apollo Investment, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Strategic Global Government Fund Inc. Closed-End Fund 0 0 0 0 N/A
Apollo Investment 0 3 2 0 2.40

Apollo Investment has a consensus target price of $17.40, indicating a potential upside of 10.83%. Given Apollo Investment’s higher probable upside, analysts clearly believe Apollo Investment is more favorable than Strategic Global Government Fund Inc. Closed-End Fund.

Insider & Institutional Ownership

7.4% of Strategic Global Government Fund Inc. Closed-End Fund shares are held by institutional investors. Comparatively, 45.0% of Apollo Investment shares are held by institutional investors. 0.4% of Apollo Investment shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Strategic Global Government Fund Inc. Closed-End Fund and Apollo Investment’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Strategic Global Government Fund Inc. Closed-End Fund N/A N/A N/A
Apollo Investment 23.80% 9.25% 5.27%

Risk and Volatility

Strategic Global Government Fund Inc. Closed-End Fund has a beta of 0.48, meaning that its stock price is 52% less volatile than the S&P 500. Comparatively, Apollo Investment has a beta of 1.23, meaning that its stock price is 23% more volatile than the S&P 500.

Summary

Apollo Investment beats Strategic Global Government Fund Inc. Closed-End Fund on 10 of the 11 factors compared between the two stocks.

About Strategic Global Government Fund Inc. Closed-End Fund

PIMCO Strategic Global Government Fund, Inc. is a closed-ended fixed income mutual fund launched and managed by Allianz Global Investors Fund Management LLC. The fund is co-managed by Pacific Investment Management Company LLC. It invests in fixed income markets across the globe. The fund primarily invests in government securities, including bonds issued or guaranteed by the United States or foreign governments, by their agencies, authorities or instrumentalities, or by supranational entities. It employs fundamental analysis with a focus on top down stock picking approach to create its portfolio. PIMCO Strategic Global Government Fund, Inc. was formed on February 24, 1994 and is domiciled in the United States.

About Apollo Investment

Apollo Investment Corporation is business development company specializing in middle market companies. It provides direct equity capital, mezzanine and senior secured loans, unsecured debt, and subordinated debt and loans. It also seeks to invest in PIPES transactions. The fund may also invest in securities of public companies that are thinly traded and may acquire investments in the secondary market and structured products. It prefers to invest in warrants, makes equity co-investments, and may also invest in cash equivalents, U.S. government securities, high-quality debt investments that mature in one year or less, high-yield bonds, distressed debt, non-U.S. investments, or securities of public companies that are not thinly traded. It also focuses on other investments such as collateralized loan obligations and credit-linked notes. The fund typically invests in building materials, business services, cable television, chemicals, consumer products, direct marketing, distribution, energy and utilities, financial services, healthcare, manufacturing, media, publishing, retail and transportation. It primarily invests between $20 million and $250 million in its portfolio companies. The fund seeks to make investments with stated maturities of five to 10 years.

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