TPG Specialty Lending (TSLX) versus MFS Charter Income Trust (MCR) Critical Analysis
TPG Specialty Lending (NYSE: TSLX) and MFS Charter Income Trust (NYSE:MCR) are both small-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, valuation, dividends, risk, profitability, analyst recommendations and institutional ownership.
This table compares TPG Specialty Lending and MFS Charter Income Trust’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|TPG Specialty Lending||56.43%||12.63%||7.53%|
|MFS Charter Income Trust||N/A||N/A||N/A|
This is a summary of recent ratings and recommmendations for TPG Specialty Lending and MFS Charter Income Trust, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|TPG Specialty Lending||0||1||2||0||2.67|
|MFS Charter Income Trust||0||0||0||0||N/A|
TPG Specialty Lending currently has a consensus price target of $21.33, indicating a potential upside of 4.22%. Given TPG Specialty Lending’s higher probable upside, analysts plainly believe TPG Specialty Lending is more favorable than MFS Charter Income Trust.
TPG Specialty Lending pays an annual dividend of $1.56 per share and has a dividend yield of 7.6%. MFS Charter Income Trust does not pay a dividend. TPG Specialty Lending pays out 79.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Institutional and Insider Ownership
63.1% of TPG Specialty Lending shares are owned by institutional investors. 4.8% of TPG Specialty Lending shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Valuation and Earnings
This table compares TPG Specialty Lending and MFS Charter Income Trust’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|TPG Specialty Lending||$192.41 million||6.41||$107.33 million||$1.96||10.44|
|MFS Charter Income Trust||N/A||N/A||N/A||N/A||N/A|
TPG Specialty Lending has higher revenue and earnings than MFS Charter Income Trust.
Volatility & Risk
TPG Specialty Lending has a beta of 0.69, meaning that its share price is 31% less volatile than the S&P 500. Comparatively, MFS Charter Income Trust has a beta of 0.47, meaning that its share price is 53% less volatile than the S&P 500.
TPG Specialty Lending beats MFS Charter Income Trust on 10 of the 11 factors compared between the two stocks.
TPG Specialty Lending Company Profile
TPG Specialty Lending, Inc. is an externally managed, closed-end, non-diversified management investment company. The Company is a specialty finance company focused on lending to middle-market companies. It seeks to generate current income primarily in the United States-domiciled middle-market companies through direct originations of senior secured loans and originations of mezzanine and unsecured loans and investments in corporate bonds and equity securities. The Company invests in first-lien debt, second-lien debt, mezzanine and unsecured debt and equity and other investments. Its first-lien debt may include standalone first-lien loans; last out first-lien loans; unitranche loans and secured corporate bonds. Its second-lien debt may include secured loans and secured corporate bonds, with a secondary priority behind first-lien debt. As of December 31, 2016, the Company’s portfolio was invested across 19 different industries. The Company’s investment advisor is TSL Advisers, LLC.
MFS Charter Income Trust Company Profile
MFS Charter Income Trust (Fund) is a diversified closed-end management investment company. The Fund’s investment objective is to seek high current income, but may also consider capital appreciation. The Fund normally invests in debt instruments. The Fund also invests in corporate bonds of the United States and/or foreign issuers, the United States Government securities, foreign government securities, mortgage-backed and other asset-backed securities and/or debt instruments of issuers located in emerging market countries. The Fund’s portfolio comprises bonds, floating rate loans, equities, cash and cash equivalent and other. It invests in a range of Fixed income sectors, such as high yield corporates non-united states government bonds, investment grade corporates, emerging markets bonds, commercial mortgage-backed securities, asset-backed securities and collateralized debt obligations. Massachusetts Financial Services Company is the Fund’s investment advisor.
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