Head-To-Head Analysis: The Korea Fund (NYSE:KF) & MidCap Financial Investment (NASDAQ:MFIC)

MidCap Financial Investment (NASDAQ:MFIC) and The Korea Fund (NYSE:KF) are both small-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, analyst recommendations, earnings, institutional ownership, valuation, profitability and risk.

Risk & Volatility

MidCap Financial Investment has a beta of 1.48, suggesting that its stock price is 48% more volatile than the S&P 500. Comparatively, The Korea Fund has a beta of 1.14, suggesting that its stock price is 14% more volatile than the S&P 500.

Insider and Institutional Ownership

28.5% of MidCap Financial Investment shares are held by institutional investors. Comparatively, 70.0% of The Korea Fund shares are held by institutional investors. 1.1% of MidCap Financial Investment shares are held by company insiders. Comparatively, 59.5% of The Korea Fund shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares MidCap Financial Investment and The Korea Fund”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MidCap Financial Investment	$276.52 million	4.67	$118.76 million	$1.56	8.82
The Korea Fund	$11.97 million	7.97	N/A	N/A	N/A

MidCap Financial Investment has higher revenue and earnings than The Korea Fund.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for MidCap Financial Investment and The Korea Fund, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MidCap Financial Investment	0	3	4	0	2.57
The Korea Fund	0	0	0	0	0.00

MidCap Financial Investment currently has a consensus target price of $14.86, indicating a potential upside of 7.97%. Given MidCap Financial Investment’s stronger consensus rating and higher probable upside, equities analysts clearly believe MidCap Financial Investment is more favorable than The Korea Fund.

Profitability

This table compares MidCap Financial Investment and The Korea Fund’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MidCap Financial Investment	37.05%	11.37%	4.70%
The Korea Fund	N/A	N/A	N/A

Dividends

MidCap Financial Investment pays an annual dividend of $1.52 per share and has a dividend yield of 11.0%. The Korea Fund pays an annual dividend of $0.45 per share and has a dividend yield of 2.3%. MidCap Financial Investment pays out 97.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

MidCap Financial Investment beats The Korea Fund on 9 of the 13 factors compared between the two stocks.

About MidCap Financial Investment

MidCap Financial Investment Corporation (Former name Apollo Investment Corporation) is business development company and a closed-end, externally managed, non-diversified management investment company. It is elected to be treated as a business development company (BDC) under the Investment Company Act of 1940 (the 1940 Act) specializing in private equity investments in leveraged buyouts, acquisitions, recapitalizations, growth capital, refinancing and private middle market companies. It provides direct equity capital, mezzanine, first lien secured loans, stretch senior loans, unitranche loans, second lien secured loans and senior secured loans, unsecured debt, and subordinated debt and loans. It also seeks to invest in PIPES transactions. The fund may also invest in securities of public companies that are thinly traded and may acquire investments in the secondary market and structured products. It prefers to invest in preferred equity, common equity / interests and warrants and makes equity co-investments. It may invest in cash equivalents, U.S. government securities, high-quality debt investments that mature in one year or less, high-yield bonds, distressed debt, non-U.S. investments, or securities of public companies that are not thinly traded. It also focuses on other investments such as collateralized loan obligations (CLOs) and credit-linked notes (CLNs). The fund typically invests in construction and building materials, business services, plastics & rubber, advertising, capital equipment, education, cable television, chemicals, consumer products/goods durable and non-durable and customer services, direct marketing, energy oil & gas, electricity and utilities. The fund also invest in aerospace & defense, wholesale, telecommunications, financial services, hotel, gaming, leisure, restaurants; environmental industries, healthcare and pharmaceuticals, high tech industries, beverages, food and tobacco, manufacturing, media diversified & production, printing and publishing, retail, automation, aviation and consumer transport, transportation, cargo and distribution. It primarily invests in United States. It primarily invests between $20 million and $250 million in its portfolio companies and EBITDA with less than $75 million. The fund seeks to make investments with stated maturities of five to 10 years.

About The Korea Fund

The Korea Fund, Inc. is a closed-ended equity mutual fund launched and managed by Allianz Global Investors U.S. LLC. The fund invests in the public equity markets of Korea. It seeks to invest in stocks of companies operating across diversified sectors. The fund primarily invests in growth stocks of companies. It employs fundamental analysis with a bottom-up stock picking approach, focusing on such factors as price-to-earnings ratios, dividend yields, and earnings-per-share growth to create its portfolio. The fund benchmarks the performance of its portfolio against the MSCI Korea 25/50 Index. It uses 'Grassroots Research' to make its investments. The Korea Fund, Inc. was formed on August 29, 1984 and is domiciled in the United States.