Harvest Capital Credit Corporation (NASDAQ: HCAP) and BlackRock LT Municipal Advantage Trust (NYSE:BTA) are both small-cap financials companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, valuation, risk, institutional ownership, profitability, analyst recommendations and dividends.

Profitability

This table compares Harvest Capital Credit Corporation and BlackRock LT Municipal Advantage Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Harvest Capital Credit Corporation 14.76% 11.04% 6.80%
BlackRock LT Municipal Advantage Trust -45.66% -3.37% -2.00%

Dividends

Harvest Capital Credit Corporation pays an annual dividend of $1.35 per share and has a dividend yield of 11.4%. BlackRock LT Municipal Advantage Trust does not pay a dividend. Harvest Capital Credit Corporation pays out 287.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Ratings

This is a summary of current ratings for Harvest Capital Credit Corporation and BlackRock LT Municipal Advantage Trust, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Harvest Capital Credit Corporation 0 1 0 0 2.00
BlackRock LT Municipal Advantage Trust 2 6 5 0 2.23

Harvest Capital Credit Corporation presently has a consensus target price of $13.50, indicating a potential upside of 14.12%. BlackRock LT Municipal Advantage Trust has a consensus target price of $343.85, indicating a potential upside of 2,753.50%. Given BlackRock LT Municipal Advantage Trust’s stronger consensus rating and higher possible upside, analysts clearly believe BlackRock LT Municipal Advantage Trust is more favorable than Harvest Capital Credit Corporation.

Valuation & Earnings

This table compares Harvest Capital Credit Corporation and BlackRock LT Municipal Advantage Trust’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Harvest Capital Credit Corporation $20.89 million 3.68 $6.00 million $0.47 25.17
BlackRock LT Municipal Advantage Trust N/A N/A N/A $0.04 301.25

Harvest Capital Credit Corporation has higher revenue and earnings than BlackRock LT Municipal Advantage Trust. Harvest Capital Credit Corporation is trading at a lower price-to-earnings ratio than BlackRock LT Municipal Advantage Trust, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

6.0% of Harvest Capital Credit Corporation shares are owned by institutional investors. 9.5% of Harvest Capital Credit Corporation shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Risk and Volatility

Harvest Capital Credit Corporation has a beta of 0.74, suggesting that its stock price is 26% less volatile than the S&P 500. Comparatively, BlackRock LT Municipal Advantage Trust has a beta of -0.05, suggesting that its stock price is 105% less volatile than the S&P 500.

Summary

Harvest Capital Credit Corporation beats BlackRock LT Municipal Advantage Trust on 9 of the 13 factors compared between the two stocks.

Harvest Capital Credit Corporation Company Profile

Harvest Capital Credit Corporation is an externally managed, closed-end, non-diversified management investment company. The Company operates as a business development company and provides customized financing solutions for small to mid-sized companies. Its investment objective is to generate both current income and capital appreciation by making direct investments in the form of subordinated debt, senior debt, and to a lesser extent, minority equity investments in privately-held the United States small to mid-sized companies. Its investment portfolio includes over 56.8% of senior secured term loans, 40.8% of junior secured term loans, 1.3% of equity investments and 1.1% of collateralized loan obligation (CLO) equity at fair value. It may also invest in other investments, such as loans to larger, publicly-traded companies, high-yield bonds and distressed debt securities. It may also invest in debt and equity securities issued by CLO funds. HCAP Advisors LLC is its investment adviser.

BlackRock LT Municipal Advantage Trust Company Profile

BlackRock Long-Term Municipal Advantage Trust (the Trust) is a non-diversified, closed-end management investment company. The Trust’s investment objective is to provide current income exempt from regular federal income tax. The Trust seeks to achieve its investment objective by investing, under normal market conditions, at least 80% of its assets in municipal obligations and derivative instruments with exposure to such municipal obligations, in each case that are exempt from federal income tax (except that the interest may be subject to the federal alternative minimum tax). The Trust invests primarily in long-term municipal bonds with a maturity of more than 10 years at the time of investment. The Trust’s municipal bond portfolio will have a dollar-weighted average maturity of more than 10 years. The Trust may invest directly in such securities or synthetically through the use of derivatives. BlackRock Advisors, LLC is the investment manager of the Trust.

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