Head-To-Head Comparison: European Equity Fund (NYSE:EEA) vs. MVC Capital (NYSE:MVC)
European Equity Fund (NYSE:EEA) and MVC Capital (NYSE:MVC) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, valuation, dividends, institutional ownership, profitability, earnings and risk.
Risk & Volatility
European Equity Fund has a beta of 0.98, meaning that its share price is 2% less volatile than the S&P 500. Comparatively, MVC Capital has a beta of 1.74, meaning that its share price is 74% more volatile than the S&P 500.
European Equity Fund pays an annual dividend of $0.15 per share and has a dividend yield of 1.8%. MVC Capital pays an annual dividend of $0.68 per share and has a dividend yield of 10.4%. MVC Capital pays out 104.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. European Equity Fund has increased its dividend for 1 consecutive years and MVC Capital has increased its dividend for 2 consecutive years. MVC Capital is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Valuation & Earnings
This table compares European Equity Fund and MVC Capital’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|European Equity Fund||N/A||N/A||N/A||N/A||N/A|
|MVC Capital||$30.55 million||3.78||$16.32 million||$0.65||10.02|
MVC Capital has higher revenue and earnings than European Equity Fund.
Institutional & Insider Ownership
52.8% of European Equity Fund shares are owned by institutional investors. Comparatively, 49.4% of MVC Capital shares are owned by institutional investors. 0.1% of European Equity Fund shares are owned by insiders. Comparatively, 10.0% of MVC Capital shares are owned 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.
This table compares European Equity Fund and MVC Capital’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|European Equity Fund||N/A||N/A||N/A|
This is a breakdown of current ratings and recommmendations for European Equity Fund and MVC Capital, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|European Equity Fund||0||0||0||0||N/A|
MVC Capital has a consensus target price of $13.00, indicating a potential upside of 99.69%. Given MVC Capital’s higher probable upside, analysts clearly believe MVC Capital is more favorable than European Equity Fund.
MVC Capital beats European Equity Fund on 8 of the 11 factors compared between the two stocks.
European Equity Fund Company Profile
The European Equity Fund, Inc. is a closed ended equity mutual fund launched by Deutsche Investment Management Americas Inc. The fund is managed by Deutsche Asset Management International GmbH. It invests in the public equity markets of Europe. The fund seeks to invest in the stocks of companies operating across diversified sectors. It primarily invests in equity or equity-linked securities of companies. The fund seeks to benchmark the performance of its portfolio against the MSCI-EMU Index. It was formerly known as Germany Fund Inc. The European Equity Fund, Inc. was formed on July 23, 1986 and is domiciled in the United States.
MVC Capital Company Profile
MVC Capital, Inc. is a business development company specializing in equity, acquisition financing, mezzanine financing, management buyouts, leveraged buildups, corporate partnerships, PIPE transactions, going private transactions, private company recapitalizations, operational turnarounds, and growth and expansion capital transaction financing. The company seeks to invest in mature, small, and middle-market companies. It seeks to invest in companies in the consumer products, business services, industrial manufacturing and services, automotive retailing, energy, food and food service, financial services, insurance, industrial distribution and value-added distribution, medical devices and equipment, specialty chemicals, and security sectors. The company prefers to invest in companies based in the United States. The firm typically invests between $3 million and $25 million for control and non-control stakes in companies with revenues between $10 million and $150 million and EBITDA between $3 million and $25 million. It prefers to be the lead investor in transactions and also co-invests in companies with other private equity sponsors. The company invests in the form of preferred and common equity, and warrants or rights to acquire equity interests; bridge loans; term loans; debt; cash flow loans; senior and subordinated loans; convertible securities; venture capital; mezzanine; and private equity investments. It exits its investments in the form of maturity of loan, public offering, sale, mergers and acquisitions, and financial recapitalizations. It prefers to take majority stake in companies.
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