THL Credit (NASDAQ: TCRD) is one of 556 publicly-traded companies in the “Closed End Funds” industry, but how does it contrast to its competitors? We will compare THL Credit to related companies based on the strength of its dividends, risk, analyst recommendations, institutional ownership, valuation, earnings and profitability.

Institutional and Insider Ownership

45.6% of THL Credit shares are held by institutional investors. Comparatively, 23.2% of shares of all “Closed End Funds” companies are held by institutional investors. 0.8% of THL Credit shares are held by insiders. Comparatively, 3.3% of shares of all “Closed End Funds” companies are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Volatility and Risk

THL Credit has a beta of 1.07, suggesting that its stock price is 7% more volatile than the S&P 500. Comparatively, THL Credit’s competitors have a beta of 0.56, suggesting that their average stock price is 44% less volatile than the S&P 500.

Profitability

This table compares THL Credit and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
THL Credit 29.81% 10.22% 5.66%
THL Credit Competitors 518.10% 7.79% 6.00%

Earnings and Valuation

This table compares THL Credit and its competitors revenue, earnings per share and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
THL Credit N/A N/A 12.30
THL Credit Competitors $57.20 million $39.05 million -0.23

THL Credit’s competitors have higher revenue and earnings than THL Credit. THL Credit is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Dividends

THL Credit pays an annual dividend of $1.08 per share and has a dividend yield of 11.9%. THL Credit pays out 145.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Closed End Funds” companies pay a dividend yield of 9.0% and pay out 87.5% of their earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of current ratings and price targets for THL Credit and its competitors, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
THL Credit 0 5 2 0 2.29
THL Credit Competitors 341 1474 1499 26 2.36

THL Credit presently has a consensus price target of $11.00, suggesting a potential upside of 20.88%. As a group, “Closed End Funds” companies have a potential upside of 41.33%. Given THL Credit’s competitors stronger consensus rating and higher probable upside, analysts clearly believe THL Credit has less favorable growth aspects than its competitors.

Summary

THL Credit competitors beat THL Credit on 9 of the 14 factors compared.

THL Credit Company Profile

THL Credit, Inc. is an externally managed, non-diversified closed-end management investment company. The Company’s investment objective is to generate both current income and capital appreciation, primarily through investments in privately negotiated debt and equity securities of lower middle market companies. The Company is a direct lender to lower middle-market companies and invests primarily in directly originated first lien senior secured loans, including unitranche investments. In certain instances, it also makes second lien secured loans and subordinated, or mezzanine, debt investments, which may include an associated equity component, such as warrants, preferred stock or similar securities, and direct equity investments. Its first lien senior secured loans may be structured as traditional first lien senior secured loans or as unitranche loans. The Company’s investment activities are managed by THL Credit Advisors LLC.

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