Financial Review: PIMCO Strategic Income Fund (NYSE:RCS) vs. Horizon Technology Finance (NASDAQ:HRZN)

Horizon Technology Finance (NASDAQ:HRZNGet Rating) and PIMCO Strategic Income Fund (NYSE:RCSGet Rating) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, dividends, analyst recommendations, profitability, risk, institutional ownership and valuation.

Valuation & Earnings

This table compares Horizon Technology Finance and PIMCO Strategic Income Fund’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Horizon Technology Finance $60.01 million 4.80 $27.78 million $1.24 9.68
PIMCO Strategic Income Fund N/A N/A N/A N/A N/A

Horizon Technology Finance has higher revenue and earnings than PIMCO Strategic Income Fund.

Dividends

Horizon Technology Finance pays an annual dividend of $1.20 per share and has a dividend yield of 10.0%. PIMCO Strategic Income Fund pays an annual dividend of $0.61 per share and has a dividend yield of 11.5%. Horizon Technology Finance pays out 96.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Risk and Volatility

Horizon Technology Finance has a beta of 1.02, meaning that its stock price is 2% more volatile than the S&P 500. Comparatively, PIMCO Strategic Income Fund has a beta of 0.82, meaning that its stock price is 18% less volatile than the S&P 500.

Profitability

This table compares Horizon Technology Finance and PIMCO Strategic Income Fund’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Horizon Technology Finance 41.45% 11.32% 5.55%
PIMCO Strategic Income Fund N/A N/A N/A

Insider & Institutional Ownership

11.3% of Horizon Technology Finance shares are owned by institutional investors. Comparatively, 20.5% of PIMCO Strategic Income Fund shares are owned by institutional investors. 1.5% of Horizon Technology Finance shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Horizon Technology Finance and PIMCO Strategic Income Fund, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Horizon Technology Finance 0 2 0 0 2.00
PIMCO Strategic Income Fund 0 0 0 0 N/A

Horizon Technology Finance currently has a consensus target price of $15.50, indicating a potential upside of 29.17%. Given Horizon Technology Finance’s higher probable upside, equities research analysts plainly believe Horizon Technology Finance is more favorable than PIMCO Strategic Income Fund.

Summary

Horizon Technology Finance beats PIMCO Strategic Income Fund on 7 of the 10 factors compared between the two stocks.

Horizon Technology Finance Company Profile (Get Rating)

Horizon Technology Finance Corporation is a business development company specializing in lending and and investing in development-stage investments. It focuses on making secured debt and venture lending investments to venture capital backed companies in the technology, life science, healthcare information and services, and cleantech industries. It seeks to invest in companies in the United States.

PIMCO Strategic Income Fund Company Profile (Get Rating)

PIMCO Strategic Global Government Fund, Inc. is a closed-ended fixed income mutual fund launched and managed by Allianz Global Investors Fund Management LLC. The fund is co-managed by Pacific Investment Management Company LLC. It invests in fixed income markets across the globe. The fund primarily invests in government securities, including bonds issued or guaranteed by the United States or foreign governments, by their agencies, authorities or instrumentalities, or by supranational entities. It employs fundamental analysis with a focus on top down stock picking approach to create its portfolio. PIMCO Strategic Global Government Fund, Inc. was formed on February 24, 1994 and is domiciled in the United States.

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