SLR Investment (NASDAQ:SLRC) vs. MFS High Income Municipal Trust (NYSE:CXE) Critical Survey

SLR Investment (NASDAQ:SLRC) and MFS High Income Municipal Trust (NYSE:CXE) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their dividends, valuation, analyst recommendations, profitability, risk, earnings and institutional ownership.

Valuation and Earnings

This table compares SLR Investment and MFS High Income Municipal Trust”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SLR Investment	$229.31 million	3.99	$76.39 million	$1.77	9.46
MFS High Income Municipal Trust	N/A	N/A	N/A	N/A	N/A

SLR Investment has higher revenue and earnings than MFS High Income Municipal Trust.

Risk and Volatility

SLR Investment has a beta of 1.13, indicating that its stock price is 13% more volatile than the S&P 500. Comparatively, MFS High Income Municipal Trust has a beta of 0.66, indicating that its stock price is 34% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations for SLR Investment and MFS High Income Municipal Trust, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SLR Investment	2	2	0	0	1.50
MFS High Income Municipal Trust	0	0	0	0	0.00

SLR Investment currently has a consensus price target of $15.25, indicating a potential downside of 8.96%. Given SLR Investment’s stronger consensus rating and higher possible upside, equities analysts plainly believe SLR Investment is more favorable than MFS High Income Municipal Trust.

Insider and Institutional Ownership

35.3% of SLR Investment shares are held by institutional investors. Comparatively, 34.4% of MFS High Income Municipal Trust shares are held by institutional investors. 8.6% of SLR Investment shares are held 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 SLR Investment and MFS High Income Municipal Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SLR Investment	40.89%	9.73%	3.90%
MFS High Income Municipal Trust	N/A	N/A	N/A

Dividends

SLR Investment pays an annual dividend of $1.64 per share and has a dividend yield of 9.8%. MFS High Income Municipal Trust pays an annual dividend of $0.18 per share and has a dividend yield of 4.8%. SLR Investment pays out 92.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

SLR Investment beats MFS High Income Municipal Trust on 10 of the 11 factors compared between the two stocks.

About SLR Investment

SLR Investment Corp. is a business development company specializing in secured debt (first lien unitranche and second lien), subordinated (unsecured) debt, minority equity, leveraged buyouts, acquisitions, recapitalizations, general refinancing, growth capital and strategic income-oriented control equity investments in leveraged middle market companies. The fund invests in aerospace and defense; air freight & logistics; asset management; automotive; banking; beverage, food and tobacco; building products; buildings and real estate; broadcasting and entertainment; cargo transport; commercial services and supplies; communications equipment; chemicals, plastics and rubber; containers, packaging and glass; construction & engineering; diversified/conglomerate manufacturing; consumer Finance; distributors; diversified/conglomerate services; diversified financial services; diversified real estate activities; food products; Footwear; Education Services; diversified telecommunications services; electronics; farming and agriculture; finance; grocery; health care equipment and supplies; health care facilities; education and childcare; home and office furnishing, durable consumer products; hotels, motels, inns and gaming; insurance; restaurants, leisure, amusement, and entertainment; leisure equipment tolls and services, media, multiline retail, multi sector holdings; paper and forest products; personal products; professional services, research and consulting services, software; specialty retail; textiles apparel and luxury goods, thrifts and mortgage finance, trading companies and distributors, utilities, and wireless telecommunication services; industrial conglomerates; internet software and services, IT services, machinery; mining, steel, iron, and non-precious metals; oil and gas; personal, food and miscellaneous services; printing and publishing; retail stores; telecommunications; textiles and leather; and utilities. It also invests in life sciences with focus on specialty pharmaceuticals, medical devices, biotech, health Care Providers and services; health Care technology, enabling technologies and tools. The fund primarily invests in United States. The fund’s investments generally range between $5 million and $100 million. The fund invests in companies with revenues between $50 million and $1 billion and EBITDA between $15 million and $100 million. It invests in the form of senior secured loans, mezzanine loans, and equity securities. It may also seek investments in thinly traded public companies and also make secondary investments. The fund makes non-control equity investments. It primarily exits within three years of the initial capital commitment.

About MFS High Income Municipal Trust

MFS High Income Municipal Trust is a close ended fixed income mutual fund launched and managed by Massachusetts Financial Services Company. The fund invests in the fixed income markets. It primarily invests in municipal bonds and local general obligations of various sectors, such as multifamily, hospitals, care retirement, and investor-owned utilities. The fund benchmarks the performance of its portfolio against Barclays Municipal Bond Index. It was formerly known as Colonial High Income Municipal Trust. MFS High Income Municipal Trust was formed on February 17, 1989 and is domiciled in United States.