Head-To-Head Review: Garrison Capital (GARS) & Its Competitors

Garrison Capital (NASDAQ: GARS) is one of 50 publicly-traded companies in the “Investment Management & Fund Operators” industry, but how does it weigh in compared to its peers? We will compare Garrison Capital to similar businesses based on the strength of its valuation, profitability, analyst recommendations, risk, earnings, dividends and institutional ownership.

Valuation & Earnings

This table compares Garrison Capital and its peers gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Garrison Capital $42.95 million -$4.80 million 25.03
Garrison Capital Competitors $6.06 billion $896.42 million 998.95

Garrison Capital’s peers have higher revenue and earnings than Garrison Capital. Garrison Capital is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Dividends

Garrison Capital pays an annual dividend of $1.12 per share and has a dividend yield of 13.2%. Garrison Capital pays out 329.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Investment Management & Fund Operators” companies pay a dividend yield of 2.3% and pay out 45.7% of their earnings in the form of a dividend.

Institutional & Insider Ownership

24.2% of Garrison Capital shares are owned by institutional investors. Comparatively, 62.4% of shares of all “Investment Management & Fund Operators” companies are owned by institutional investors. 5.8% of Garrison Capital shares are owned by insiders. Comparatively, 10.6% of shares of all “Investment Management & Fund Operators” companies are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Garrison Capital and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Garrison Capital 14.66% 9.33% 4.49%
Garrison Capital Competitors -241.02% -0.37% 4.68%

Analyst Ratings

This is a summary of current ratings and target prices for Garrison Capital and its peers, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Garrison Capital 0 5 1 0 2.17
Garrison Capital Competitors 239 1624 1801 53 2.45

Garrison Capital presently has a consensus target price of $10.33, indicating a potential upside of 21.43%. As a group, “Investment Management & Fund Operators” companies have a potential upside of 8.76%. Given Garrison Capital’s higher probable upside, analysts clearly believe Garrison Capital is more favorable than its peers.

Volatility and Risk

Garrison Capital has a beta of 0.24, suggesting that its share price is 76% less volatile than the S&P 500. Comparatively, Garrison Capital’s peers have a beta of 1.33, suggesting that their average share price is 33% more volatile than the S&P 500.

Summary

Garrison Capital peers beat Garrison Capital on 11 of the 15 factors compared.

About Garrison Capital

Garrison Capital Inc. is a managed, closed-end, non-diversified management investment company. The Company’s investment objective is to generate current income and capital appreciation by making investments primarily in debt securities and loans of the United States-based middle-market companies, which it defines as those having annual earnings before interest, taxes and depreciation, or EBITDA, of certain amount. It invests or provides direct lending in first lien senior secured loans, second lien senior secured loans, one-stop senior secured loans or unitranche loans, subordinated or mezzanine loans, unsecured consumer loans and to a lesser extent, selected equity co-investments in middle-market companies. The Company intends to generate risk-adjusted net returns by assembling a portfolio of investments. The Company’s investment advisor is Garrison Capital Advisers LLC.

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