General American Investors (NYSE:GAM – Get Rating) and MidCap Financial Investment (NASDAQ:MFIC – Get Rating) are both small-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, risk, analyst recommendations, earnings, dividends and profitability.
General American Investors pays an annual dividend of $1.00 per share and has a dividend yield of 2.5%. MidCap Financial Investment pays an annual dividend of $1.52 per share and has a dividend yield of 13.1%. MidCap Financial Investment pays out 185.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. MidCap Financial Investment has increased its dividend for 2 consecutive years. MidCap Financial Investment is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Risk & Volatility
General American Investors has a beta of 1.13, suggesting that its share price is 13% more volatile than the S&P 500. Comparatively, MidCap Financial Investment has a beta of 1.58, suggesting that its share price is 58% more volatile than the S&P 500.
|Net Margins||Return on Equity||Return on Assets|
|General American Investors||N/A||N/A||N/A|
|MidCap Financial Investment||21.81%||10.42%||4.06%|
This is a breakdown of recent ratings and target prices for General American Investors and MidCap Financial Investment, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|General American Investors||0||0||0||0||N/A|
|MidCap Financial Investment||0||2||1||0||2.33|
MidCap Financial Investment has a consensus target price of $12.50, indicating a potential upside of 7.57%. Given MidCap Financial Investment’s higher possible upside, analysts plainly believe MidCap Financial Investment is more favorable than General American Investors.
Earnings & Valuation
This table compares General American Investors and MidCap Financial Investment’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|General American Investors||N/A||N/A||N/A||N/A||N/A|
|MidCap Financial Investment||$230.35 million||3.30||$1.29 million||$0.82||14.17|
MidCap Financial Investment has higher revenue and earnings than General American Investors.
Institutional and Insider Ownership
22.6% of General American Investors shares are owned by institutional investors. Comparatively, 29.3% of MidCap Financial Investment shares are owned by institutional investors. 8.1% of General American Investors shares are owned by company insiders. Comparatively, 0.9% of MidCap Financial Investment shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
MidCap Financial Investment beats General American Investors on 10 of the 12 factors compared between the two stocks.
About General American Investors
General American Investors Company, Inc. is a diversified, closed-end management investment company. The primary objective of the Company is long-term capital appreciation. The Company invests principally in common stocks. The Company may purchase and write (sell) put and call options. The Company has internally managed a global portfolio of investments, consisting of common stocks of the United States companies, including international and private securities. The Company invests in various sectors, such as aerospace/defense, building and real estate, communications and information services, computer software and systems, consumer products and services, environmental control, finance and insurance, health care/pharmaceuticals and machinery and equipment.
About MidCap Financial Investment
Apollo Investment Corporation (NASDAQ: AINV) , a Maryland corporation organized on February 2, 2004, is a closed-end, externally managed, non-diversified management investment company that has elected to be treated as a business development company (”BDC”) under the Investment Company Act of 1940 (the ”1940 Act”). In addition, for tax purposes we have elected to be treated as a regulated investment company (”RIC”) under the Internal Revenue Code of 1986, as amended (”the Code”). Our investment objective is to generate current income and capital appreciation. We invest in various forms of debt investments including senior secured loans, subordinated and mezzanine investments and/or equity in private middle-market companies. From time to time, we may also invest in the securities of public companies. Our portfolio is comprised primarily of investments in subordinated debt, sometimes referred to as mezzanine debt, and senior secured loans of private middle-market companies that, in the case of senior secured loans, generally are not broadly syndicated and whose aggregate tranche size is typically less than $300 million. From time to time, our portfolio also includes equi
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