Liberty All-Star Equity Fund (NYSE: USA) and Medley Capital Corporation (NYSE:MCC) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, profitabiliy, dividends, earnings, risk and institutional ownership.
Risk & Volatility
Liberty All-Star Equity Fund has a beta of 1.21, indicating that its share price is 21% more volatile than the S&P 500. Comparatively, Medley Capital Corporation has a beta of 1.25, indicating that its share price is 25% more volatile than the S&P 500.
This table compares Liberty All-Star Equity Fund and Medley Capital Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Liberty All-Star Equity Fund||N/A||N/A||N/A|
|Medley Capital Corporation||4.60%||8.10%||4.00%|
Institutional and Insider Ownership
31.3% of Liberty All-Star Equity Fund shares are held by institutional investors. Comparatively, 38.6% of Medley Capital Corporation shares are held by institutional investors. 0.1% of Liberty All-Star Equity Fund shares are held by company insiders. Comparatively, 8.7% of Medley Capital Corporation shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Valuation & Earnings
This table compares Liberty All-Star Equity Fund and Medley Capital Corporation’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Liberty All-Star Equity Fund||$20.23 million||N/A||N/A||N/A||N/A|
|Medley Capital Corporation||$106.02 million||N/A||N/A||$0.10||63.81|
This is a breakdown of current ratings for Liberty All-Star Equity Fund and Medley Capital Corporation, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Liberty All-Star Equity Fund||0||3||4||0||2.57|
|Medley Capital Corporation||0||5||0||0||2.00|
Liberty All-Star Equity Fund presently has a consensus price target of $37.90, indicating a potential upside of 575.61%. Medley Capital Corporation has a consensus price target of $7.38, indicating a potential upside of 15.60%. Given Liberty All-Star Equity Fund’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Liberty All-Star Equity Fund is more favorable than Medley Capital Corporation.
Liberty All-Star Equity Fund pays an annual dividend of $0.13 per share and has a dividend yield of 2.3%. Medley Capital Corporation pays an annual dividend of $0.64 per share and has a dividend yield of 10.0%. Medley Capital Corporation pays out 640.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Medley Capital Corporation beats Liberty All-Star Equity Fund on 8 of the 12 factors compared between the two stocks.
Liberty All-Star Equity Fund Company Profile
Liberty All-Star Equity Fund is a diversified, closed-end management investment fund. The Fund seeks total investment return comprising long-term capital appreciation and current income through investing primarily in a diversified portfolio of equity securities. It allocates its portfolio assets on an approximately equal basis among several independent investment management organizations having various investment styles recommended and monitored by its investment advisor. It invests at least 80% of its net assets in a diversified portfolio of equity securities. The Fund invests in various sectors, including financials, information technology, healthcare, consumer discretionary, consumer staples, industrials, energy, materials, real estate, utilities and telecommunication services. Its investment managers invest primarily for pension funds, endowments, foundations and other institutions. The Fund’s investment advisor is ALPS Advisors, Inc.
Medley Capital Corporation Company Profile
Medley Capital Corporation is a non-diversified closed-end management investment company. The Company’s investment objective is to generate current income and capital appreciation by lending directly to privately-held middle market companies, primarily through directly originated transactions to help these companies expand their business, refinance and make acquisitions. Its investment portfolio includes senior secured first lien term loans, senior secured second lien term loans, unitranche, senior secured first lien notes, subordinated notes and warrants and minority equity securities. It may invest up to 100% of its assets in securities acquired directly from issuers in privately negotiated transactions. Its portfolio of investments includes industries, including banking, finance, insurance and real estate; construction and building; healthcare and pharmaceuticals; beverage and food, and telecommunications. MCC Advisors LLC is the Company’s investment advisor.
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