Medley Capital Corporation (MCC) versus Fidus Investment Corporation (FDUS) Critical Review
Medley Capital Corporation (NYSE: MCC) and Fidus Investment Corporation (NASDAQ:FDUS) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, earnings, institutional ownership, dividends, valuation, analyst recommendations and risk.
This table compares Medley Capital Corporation and Fidus Investment Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Medley Capital Corporation||-6.07%||8.04%||3.92%|
|Fidus Investment Corporation||62.46%||9.08%||5.56%|
Volatility & Risk
Medley Capital Corporation has a beta of 1.2, meaning that its stock price is 20% more volatile than the S&P 500. Comparatively, Fidus Investment Corporation has a beta of 1.12, meaning that its stock price is 12% more volatile than the S&P 500.
Valuation & Earnings
This table compares Medley Capital Corporation and Fidus Investment Corporation’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Medley Capital Corporation||N/A||N/A||N/A||($0.10)||-59.70|
|Fidus Investment Corporation||N/A||N/A||N/A||$1.93||8.33|
Medley Capital Corporation is trading at a lower price-to-earnings ratio than Fidus Investment Corporation, indicating that it is currently the more affordable of the two stocks.
Medley Capital Corporation pays an annual dividend of $0.64 per share and has a dividend yield of 10.7%. Fidus Investment Corporation pays an annual dividend of $1.56 per share and has a dividend yield of 9.7%. Medley Capital Corporation pays out -640.0% of its earnings in the form of a dividend. Fidus Investment Corporation pays out 80.8% 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 is clearly the better dividend stock, given its higher yield and lower payout ratio.
Insider & Institutional Ownership
29.6% of Medley Capital Corporation shares are owned by institutional investors. Comparatively, 30.7% of Fidus Investment Corporation shares are owned by institutional investors. 8.7% of Medley Capital Corporation shares are owned by company insiders. Comparatively, 1.3% of Fidus Investment Corporation shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
This is a breakdown of current ratings and recommmendations for Medley Capital Corporation and Fidus Investment Corporation, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Medley Capital Corporation||0||5||0||0||2.00|
|Fidus Investment Corporation||0||2||1||0||2.33|
Medley Capital Corporation presently has a consensus target price of $7.00, indicating a potential upside of 17.25%. Fidus Investment Corporation has a consensus target price of $17.50, indicating a potential upside of 8.83%. Given Medley Capital Corporation’s higher probable upside, analysts plainly believe Medley Capital Corporation is more favorable than Fidus Investment Corporation.
Fidus Investment Corporation beats Medley Capital Corporation on 7 of the 12 factors compared between the two stocks.
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.
Fidus Investment Corporation Company Profile
Fidus Investment Corporation is a closed-end, non-diversified investment company. The Company provides customized debt and equity financing solutions to lower middle-market companies. The Company’s investment objective is to provide attractive risk-adjusted returns by generating both current income from its debt investments and capital appreciation from its equity-related investments. The Company typically invests in mezzanine debt, which includes senior subordinated notes and junior secured loans. The Company structures some of its debt investments as senior secured or unitranche loans. The Company’s equity securities typically consist of either a direct minority equity investment in common or preferred stock or membership/partnership interests of a portfolio company, or it may receive warrants to buy a minority equity interest in a portfolio company in connection with a debt investment. Its investment activities are managed by Fidus Investment Advisors, LLC, its investment advisor.
Receive News & Ratings for Medley Capital Corporation Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Medley Capital Corporation and related companies with Analyst Ratings Network's FREE daily email newsletter.