Head to Head Survey: Monroe Capital (MRCC) versus Lazard (LAZ)

Monroe Capital (NASDAQ: MRCC) and Lazard (NYSE:LAZ) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, profitability, earnings, institutional ownership, risk and analyst recommendations.

Dividends

Monroe Capital pays an annual dividend of $1.40 per share and has a dividend yield of 10.4%. Lazard pays an annual dividend of $1.76 per share and has a dividend yield of 3.3%. Monroe Capital pays out 100.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Lazard pays out 46.6% of its earnings in the form of a dividend. Lazard has increased its dividend for 7 consecutive years.

Institutional & Insider Ownership

26.7% of Monroe Capital shares are held by institutional investors. Comparatively, 73.0% of Lazard shares are held by institutional investors. 1.9% of Monroe Capital shares are held by company insiders. Comparatively, 2.8% of Lazard shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Risk and Volatility

Monroe Capital has a beta of 0.63, meaning that its share price is 37% less volatile than the S&P 500. Comparatively, Lazard has a beta of 1.84, meaning that its share price is 84% more volatile than the S&P 500.

Valuation and Earnings

This table compares Monroe Capital and Lazard’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Monroe Capital $51.11 million 5.32 $12.15 million $1.40 9.59
Lazard $2.70 billion 2.54 $253.58 million $3.78 13.98

Lazard has higher revenue and earnings than Monroe Capital. Monroe Capital is trading at a lower price-to-earnings ratio than Lazard, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Monroe Capital and Lazard’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Monroe Capital 20.30% 10.16% 5.89%
Lazard 11.58% 46.38% 11.99%

Analyst Ratings

This is a summary of current ratings and target prices for Monroe Capital and Lazard, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Monroe Capital 0 1 2 0 2.67
Lazard 0 1 7 0 2.88

Monroe Capital presently has a consensus price target of $15.50, indicating a potential upside of 15.41%. Lazard has a consensus price target of $60.29, indicating a potential upside of 14.09%. Given Monroe Capital’s higher probable upside, research analysts plainly believe Monroe Capital is more favorable than Lazard.

Summary

Lazard beats Monroe Capital on 13 of the 17 factors compared between the two stocks.

Monroe Capital Company Profile

Monroe Capital Corporation is a business development company specializing in senior, unitranche and junior secured debt and to a lesser extent, unsecured debt and equity investments, and buyouts in middle-market companies. The fund prefers to invest in casinos and gaming, broadcasting, publishing, alcoholic beverage and tobacco distribution, oil and gas, insurance, pharmaceuticals and bio sciences, aerospace and defense, commercial printing, natural rubber, glass, container and packaging, metals and mining, and real estate. It focuses to invest in the United States and Canada. The fund focuses on companies with a maximum of $25 million in EBITDA per year.

Lazard Company Profile

Lazard Ltd, together with its subsidiaries, operates as a financial advisory and asset management firm worldwide. Its Financial Advisory segment offers various financial advisory services regarding mergers and acquisitions and other strategic matters, restructurings, capital structure, capital raising, shareholder advisory, and various other financial matters. This segment serves corporate, partnership, institutional, government, sovereign, and individual clients. The company's Asset Management segment offers a range of investment solutions and investment management services in equity and fixed income strategies; and alternative investments and private equity funds to corporations, public funds, sovereign entities, endowments and foundations, labor funds, financial intermediaries, and private clients. Lazard Ltd was founded in 1848 and is based in Hamilton, Bermuda.

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