Critical Analysis: Gladstone Investment (GAIN) and Liberty All-Star Equity Fund (USA)
Gladstone Investment (NASDAQ: GAIN) and Liberty All-Star Equity Fund (NYSE:USA) are both small-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, risk, analyst recommendations, earnings, valuation, profitability and dividends.
Gladstone Investment pays an annual dividend of $0.78 per share and has a dividend yield of 7.1%. Liberty All-Star Equity Fund pays an annual dividend of $0.13 per share and has a dividend yield of 2.0%. Gladstone Investment pays out 57.8% of its earnings in the form of a dividend.
Gladstone Investment has a beta of 0.72, indicating that its stock price is 28% less volatile than the S&P 500. Comparatively, Liberty All-Star Equity Fund has a beta of 1.21, indicating that its stock price is 21% more volatile than the S&P 500.
Earnings and Valuation
This table compares Gladstone Investment and Liberty All-Star Equity Fund’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Gladstone Investment||$51.88 million||6.92||$44.76 million||$1.35||8.17|
|Liberty All-Star Equity Fund||N/A||N/A||N/A||N/A||N/A|
Gladstone Investment has higher revenue and earnings than Liberty All-Star Equity Fund.
Institutional & Insider Ownership
17.4% of Gladstone Investment shares are held by institutional investors. Comparatively, 26.6% of Liberty All-Star Equity Fund shares are held by institutional investors. 2.4% of Gladstone Investment shares are held by company insiders. Comparatively, 0.1% of Liberty All-Star Equity Fund shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
This table compares Gladstone Investment and Liberty All-Star Equity Fund’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|
This is a breakdown of recent recommendations and price targets for Gladstone Investment and Liberty All-Star Equity Fund, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Liberty All-Star Equity Fund||0||0||0||0||N/A|
Gladstone Investment currently has a consensus target price of $10.50, indicating a potential downside of 4.81%. Given Gladstone Investment’s higher possible upside, equities research analysts clearly believe Gladstone Investment is more favorable than Liberty All-Star Equity Fund.
Gladstone Investment beats Liberty All-Star Equity Fund on 7 of the 10 factors compared between the two stocks.
About Gladstone Investment
Gladstone Investment Corporation is an externally managed, closed-end, non-diversified management investment company. The Company’s investment objectives are to achieve and grow current income by investing in debt securities of established businesses that it believes will provide stable earnings and cash flow to pay expenses, make principal and interest payments on its outstanding indebtedness and make distributions to stockholders that grow over time, and provide its stockholders with long-term capital appreciation in the value of its assets by investing in equity securities, generally in combination with the aforementioned debt securities, of businesses that it believes can grow over time to permit it to sell its equity investments for capital gains. It has investments in sectors, such as chemicals, plastics, and rubber, and home and office furnishings, house wares, and durable consumer products, among others. Its investment advisor is Gladstone Management Corporation.
About Liberty All-Star Equity Fund
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.
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