MidCap Financial Investment (NASDAQ:MFIC) vs. Japan Smaller Capitalization Fund (NYSE:JOF) Head to Head Contrast

MidCap Financial Investment (NASDAQ:MFIC) and Japan Smaller Capitalization Fund (NYSE:JOF) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, institutional ownership, risk, dividends, analyst recommendations, earnings and valuation.

Analyst Recommendations

This is a breakdown of current ratings and target prices for MidCap Financial Investment and Japan Smaller Capitalization Fund, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MidCap Financial Investment	0	2	4	0	2.67
Japan Smaller Capitalization Fund	0	0	0	0	0.00

MidCap Financial Investment currently has a consensus target price of $14.00, indicating a potential upside of 14.66%. Given MidCap Financial Investment’s stronger consensus rating and higher possible upside, equities analysts plainly believe MidCap Financial Investment is more favorable than Japan Smaller Capitalization Fund.

Volatility and Risk

MidCap Financial Investment has a beta of 0.99, indicating that its share price is 1% less volatile than the S&P 500. Comparatively, Japan Smaller Capitalization Fund has a beta of 0.5, indicating that its share price is 50% less volatile than the S&P 500.

Dividends

MidCap Financial Investment pays an annual dividend of $1.52 per share and has a dividend yield of 12.4%. Japan Smaller Capitalization Fund pays an annual dividend of $0.31 per share and has a dividend yield of 3.2%. MidCap Financial Investment pays out 122.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares MidCap Financial Investment and Japan Smaller Capitalization Fund’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MidCap Financial Investment	37.05%	11.37%	4.70%
Japan Smaller Capitalization Fund	N/A	N/A	N/A

Insider & Institutional Ownership

28.5% of MidCap Financial Investment shares are owned by institutional investors. 0.8% of MidCap Financial Investment shares are owned by insiders. Comparatively, 1.0% of Japan Smaller Capitalization Fund shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Earnings and Valuation

This table compares MidCap Financial Investment and Japan Smaller Capitalization Fund”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MidCap Financial Investment	$113.46 million	10.04	$118.76 million	$1.24	9.85
Japan Smaller Capitalization Fund	$8.75 million	38.92	N/A	N/A	N/A

MidCap Financial Investment has higher revenue and earnings than Japan Smaller Capitalization Fund.

Summary

MidCap Financial Investment beats Japan Smaller Capitalization Fund on 10 of the 13 factors compared between the two stocks.

About MidCap Financial Investment

MidCap Financial Investment Corporation (Former name Apollo Investment Corporation) is business development company and a closed-end, externally managed, non-diversified management investment company. It is elected to be treated as a business development company (BDC) under the Investment Company Act of 1940 (the 1940 Act) specializing in private equity investments in leveraged buyouts, acquisitions, recapitalizations, growth capital, refinancing and private middle market companies. It provides direct equity capital, mezzanine, first lien secured loans, stretch senior loans, unitranche loans, second lien secured loans 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 preferred equity, common equity / interests and warrants and makes equity co-investments. It may 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 (CLOs) and credit-linked notes (CLNs). The fund typically invests in construction and building materials, business services, plastics & rubber, advertising, capital equipment, education, cable television, chemicals, consumer products/goods durable and non-durable and customer services, direct marketing, energy oil & gas, electricity and utilities. The fund also invest in aerospace & defense, wholesale, telecommunications, financial services, hotel, gaming, leisure, restaurants; environmental industries, healthcare and pharmaceuticals, high tech industries, beverages, food and tobacco, manufacturing, media diversified & production, printing and publishing, retail, automation, aviation and consumer transport, transportation, cargo and distribution. It primarily invests in United States. It primarily invests between $20 million and $250 million in its portfolio companies and EBITDA with less than $75 million. The fund seeks to make investments with stated maturities of five to 10 years.

About Japan Smaller Capitalization Fund

Japan Smaller Capitalization Fund, Inc. is a closed-ended equity mutual fund launched by Nomura Asset Management U.S.A. Inc. It is managed by Nomura Asset Management Co., Ltd. The fund invests in the public equity markets of Japan. It invests in stocks traded on the Tokyo, Osaka and Nagoya Stock Exchanges, JASDAQ, Mothers, Hercules, Centrex, and other indices. The fund seeks to invest in stocks of companies operating across diversified sectors. It primarily invests in stocks of small cap companies. The fund benchmarks the performance of its portfolio against the The Russell/Nomura Small Cap Index. It was formerly known as Japan OTC Equity Fund, Inc. Japan Smaller Capitalization Fund, Inc. was formed on March 22, 1990 and is domiciled in the United States.