Monroe Capital (NASDAQ:MRCC) & MSCI (NYSE:MSCI) Financial Comparison

MSCI (NYSE:MSCI) and Monroe Capital (NASDAQ:MRCC) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, institutional ownership, dividends, earnings, profitability, analyst recommendations and risk.

Analyst Ratings

This is a breakdown of recent ratings and target prices for MSCI and Monroe Capital, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MSCI	0	4	9	1	2.79
Monroe Capital	1	2	0	0	1.67

MSCI presently has a consensus target price of $655.90, indicating a potential upside of 21.27%. Monroe Capital has a consensus target price of $7.63, indicating a potential upside of 16.95%. Given MSCI’s stronger consensus rating and higher possible upside, research analysts plainly believe MSCI is more favorable than Monroe Capital.

Institutional and Insider Ownership

90.0% of MSCI shares are owned by institutional investors. 3.3% of MSCI shares are owned by insiders. Comparatively, 3.8% of Monroe Capital shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Risk & Volatility

MSCI has a beta of 1.32, suggesting that its share price is 32% more volatile than the S&P 500. Comparatively, Monroe Capital has a beta of 0.72, suggesting that its share price is 28% less volatile than the S&P 500.

Dividends

MSCI pays an annual dividend of $7.20 per share and has a dividend yield of 1.3%. Monroe Capital pays an annual dividend of $1.00 per share and has a dividend yield of 15.3%. MSCI pays out 45.6% of its earnings in the form of a dividend. Monroe Capital pays out -526.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. MSCI has raised its dividend for 11 consecutive years. Monroe Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation & Earnings

This table compares MSCI and Monroe Capital”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MSCI	$3.06 billion	13.30	$1.11 billion	$15.78	34.27
Monroe Capital	$60.53 million	2.33	$9.70 million	($0.19)	-34.32

MSCI has higher revenue and earnings than Monroe Capital. Monroe Capital is trading at a lower price-to-earnings ratio than MSCI, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares MSCI and Monroe Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MSCI	40.03%	-110.94%	24.20%
Monroe Capital	-9.58%	8.49%	3.58%

Summary

MSCI beats Monroe Capital on 14 of the 18 factors compared between the two stocks.

About MSCI

MSCI Inc., together with its subsidiaries, provides critical decision support tools and solutions for the investment community to manage investment processes worldwide. The Index segment provides indexes for use in various areas of the investment process, including indexed financial product, such as ETFs, mutual funds, annuities, futures, options, structured products, and over-the-counter derivatives; performance benchmarking; portfolio construction and rebalancing; and asset allocation, as well as licenses GICS and GICS Direct. The Analytics segment offers risk management, performance attribution and portfolio management content, application, an integrated view of risk and return service, and an analysis of market, credit, liquidity, counterparty, and climate risk across asset classes; managed services, including consolidation of client portfolio data, review and reconciliation of input data and results, and customized reporting; and HedgePlatform to measure, evaluate, and monitor the risk of hedge fund investments. The ESG and Climate segment provides products and services that help institutional investors understand how ESG impacts the long-term risk and return of their portfolio and individual security-level investments; and data, ratings, research, and tools to help investors navigate increasing regulation. The All Other Private Assets segment includes real estate and infrastructure data, benchmarks, return-analytics, climate assessments and market insights; business intelligence to real estate owners, managers, developers, and brokers; and offers investment decision support tools for private capital. The Private Capital Solutions segment offers tools to help private asset investors across mission-critical workflows, such as sourcing terms and conditions, evaluating operating performance, managing risk and other activities supporting private capital investing. MSCI Inc. was incorporated in 1998 and is headquartered in New York, New York.

About Monroe Capital

Monroe Capital Corporation is a business development company specializing in customized financing solutions in senior, unitranche and junior secured debt, subordinated debt financing and to a lesser extent, unsecured debt and equity, including equity co-investments in preferred and common stock and warrants. It also provides financing primarily to leveraged buyouts in lower middle-market companies. It focuses to invest in the United States and Canada. The fund prefers to invest in companies with EBITDA between $3 and $35 million. Its makes minority equity investments.