Liberty All-Star Equity Fund (NYSE: USA) and Solar Capital (NASDAQ:SLRC) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, earnings, valuation, analyst recommendations, risk, institutional ownership and dividends.
This is a summary of recent ratings and price targets for Liberty All-Star Equity Fund and Solar Capital, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Liberty All-Star Equity Fund||0||0||0||0||N/A|
Institutional and Insider Ownership
24.9% of Liberty All-Star Equity Fund shares are held by institutional investors. Comparatively, 62.1% of Solar Capital shares are held by institutional investors. 0.1% of Liberty All-Star Equity Fund shares are held by company insiders. Comparatively, 5.9% of Solar Capital shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
This table compares Liberty All-Star Equity Fund and Solar Capital’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Liberty All-Star Equity Fund||N/A||N/A||N/A|
Volatility & Risk
Liberty All-Star Equity Fund has a beta of 1.13, indicating that its share price is 13% more volatile than the S&P 500. Comparatively, Solar Capital has a beta of 0.54, indicating that its share price is 46% less volatile than the S&P 500.
Valuation and Earnings
This table compares Liberty All-Star Equity Fund and Solar Capital’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Liberty All-Star Equity Fund||N/A||N/A||N/A||N/A||N/A|
|Solar Capital||$143.34 million||6.00||$70.43 million||$1.62||12.56|
Solar Capital has higher revenue and earnings than Liberty All-Star Equity Fund.
Solar Capital pays an annual dividend of $1.64 per share and has a dividend yield of 8.1%. Liberty All-Star Equity Fund does not pay a dividend. Solar Capital pays out 101.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Solar Capital beats Liberty All-Star Equity Fund on 9 of the 11 factors compared between the two stocks.
Liberty All-Star Equity Fund Company Profile
Liberty All-Star Equity Fund is a diversified, closed-end management investment fund. The Fund seeks total investment return comprising long-term capital appreciation and current income through investing primarily in a diversified portfolio of equity securities. It allocates its portfolio assets on an approximately equal basis among several independent investment management organizations having various investment styles recommended and monitored by its investment advisor. It invests at least 80% of its net assets in a diversified portfolio of equity securities. The Fund invests in various sectors, including financials, information technology, healthcare, consumer discretionary, consumer staples, industrials, energy, materials, real estate, utilities and telecommunication services. Its investment managers invest primarily for pension funds, endowments, foundations and other institutions. The Fund’s investment advisor is ALPS Advisors, Inc.
Solar Capital Company Profile
Solar Capital Ltd is a business development company that seeks investment opportunities in middle market companies located in the US. The fund targets companies operating in the fields of aerospace & defense, automobile, banking, beverage, food & tobacco, buildings & real estate, broadcasting & entertainment, cargo transport, chemicals, plastics & rubber, containers, packaging & glass, diversified or conglomerate manufacturing, diversified financial services, electronics, farming & agriculture, finance, grocery, healthcare, education & childcare, home, office furnishings & durable consumer products, hotels, motels, inns & gaming, insurance, IT services, leisure, amusement & entertainment, machinery, mining, steel, iron & non-precious metals, personal & nondurable consumer products, personal, food &services, personal transportation, professional services, retail stores, software, telecommunications, textiles and leather, and utilities. It invests in both public & private companies and provides financing for debt, mezzanine and buyout capital requirements with an investment size ranging from $5 to $100 million.
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