TICC Capital Corp. (NASDAQ: TICC) and Gladstone Investment Corporation (NASDAQ:GAIN) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, earnings, risk, profitability, valuation, analyst recommendations and dividends.
Valuation and Earnings
This table compares TICC Capital Corp. and Gladstone Investment Corporation’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|TICC Capital Corp.||$70.48 million||4.81||$91.12 million||$1.77||3.72|
|Gladstone Investment Corporation||N/A||N/A||N/A||$0.93||10.06|
TICC Capital Corp. has higher revenue and earnings than Gladstone Investment Corporation. TICC Capital Corp. is trading at a lower price-to-earnings ratio than Gladstone Investment Corporation, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
19.8% of TICC Capital Corp. shares are owned by institutional investors. Comparatively, 20.2% of Gladstone Investment Corporation shares are owned by institutional investors. 5.9% of TICC Capital Corp. shares are owned by insiders. Comparatively, 2.4% of Gladstone Investment Corporation shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
TICC Capital Corp. pays an annual dividend of $0.80 per share and has a dividend yield of 12.2%. Gladstone Investment Corporation pays an annual dividend of $0.77 per share and has a dividend yield of 8.2%. TICC Capital Corp. pays out 45.2% of its earnings in the form of a dividend. Gladstone Investment Corporation pays out 82.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. TICC Capital Corp. is clearly the better dividend stock, given its higher yield and lower payout ratio.
This is a breakdown of recent ratings for TICC Capital Corp. and Gladstone Investment Corporation, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|TICC Capital Corp.||3||0||0||0||1.00|
|Gladstone Investment Corporation||0||1||1||0||2.50|
TICC Capital Corp. currently has a consensus price target of $6.00, indicating a potential downside of 8.81%. Gladstone Investment Corporation has a consensus price target of $9.50, indicating a potential upside of 1.50%. Given Gladstone Investment Corporation’s stronger consensus rating and higher possible upside, analysts plainly believe Gladstone Investment Corporation is more favorable than TICC Capital Corp..
Risk & Volatility
TICC Capital Corp. has a beta of 0.69, indicating that its stock price is 31% less volatile than the S&P 500. Comparatively, Gladstone Investment Corporation has a beta of 0.72, indicating that its stock price is 28% less volatile than the S&P 500.
This table compares TICC Capital Corp. and Gladstone Investment Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|TICC Capital Corp.||142.50%||7.50%||4.53%|
|Gladstone Investment Corporation||55.52%||6.95%||4.21%|
TICC Capital Corp. beats Gladstone Investment Corporation on 8 of the 14 factors compared between the two stocks.
TICC Capital Corp. Company Profile
TICC Capital Corp. is a closed-end, non-diversified management investment company. The Company’s investment objective is to maximize its portfolio’s total return. The Company primarily focuses on seeking current income by investing primarily in corporate debt securities. The Company’s debt investments may include syndicated loans and bilateral loans. The Company holds interests in structured finance investments, including collateralized loan obligation (CLO) investment vehicles that own debt securities. CLO investments may also include warehouse facilities, which are financing structures intended to aggregate loans that may be used to form the basis of a CLO vehicle. The Company may also invest in publicly traded debt and/or equity securities. Its portfolio includes its investments in various industries, such as structured finance, telecommunication services, business services, printing and publishing, and financial intermediaries. TICC Management, LLC is its investment advisor.
Gladstone Investment Corporation Company Profile
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.
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