Liberty All-Star Equity Fund (NYSE: USA) and StoneCastle Financial (NASDAQ:BANX) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their analyst recommendations, risk, earnings, profitability, institutional ownership, valuation and dividends.
Risk and Volatility
Liberty All-Star Equity Fund has a beta of 1.18, meaning that its share price is 18% more volatile than the S&P 500. Comparatively, StoneCastle Financial has a beta of 0.25, meaning that its share price is 75% less volatile than the S&P 500.
StoneCastle Financial pays an annual dividend of $1.52 per share and has a dividend yield of 7.0%. Liberty All-Star Equity Fund does not pay a dividend. StoneCastle Financial pays out 86.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
This table compares Liberty All-Star Equity Fund and StoneCastle Financial’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Liberty All-Star Equity Fund||N/A||N/A||N/A|
Valuation & Earnings
This table compares Liberty All-Star Equity Fund and StoneCastle Financial’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Liberty All-Star Equity Fund||N/A||N/A||N/A||N/A||N/A|
|StoneCastle Financial||$17.03 million||8.29||$7.01 million||$1.76||12.27|
StoneCastle Financial has higher revenue and earnings than Liberty All-Star Equity Fund.
Insider and Institutional Ownership
25.7% of Liberty All-Star Equity Fund shares are owned by institutional investors. Comparatively, 31.8% of StoneCastle Financial shares are owned by institutional investors. 0.1% of Liberty All-Star Equity Fund shares are owned by insiders. Comparatively, 8.0% of StoneCastle Financial shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
This is a breakdown of recent ratings for Liberty All-Star Equity Fund and StoneCastle Financial, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Liberty All-Star Equity Fund||0||0||0||0||N/A|
StoneCastle Financial has a consensus price target of $22.75, suggesting a potential upside of 5.37%. Given StoneCastle Financial’s higher possible upside, analysts clearly believe StoneCastle Financial is more favorable than Liberty All-Star Equity Fund.
StoneCastle Financial beats Liberty All-Star Equity Fund on 7 of the 9 factors compared between the two stocks.
Liberty All-Star Equity Fund Company Profile
Liberty All-Star Equity Fund is a diversified, closed-end management investment fund. The Fund seeks total investment return comprising long-term capital appreciation and current income through investing primarily in a diversified portfolio of equity securities. It allocates its portfolio assets on an approximately equal basis among several independent investment management organizations having various investment styles recommended and monitored by its investment advisor. It invests at least 80% of its net assets in a diversified portfolio of equity securities. The Fund invests in various sectors, including financials, information technology, healthcare, consumer discretionary, consumer staples, industrials, energy, materials, real estate, utilities and telecommunication services. Its investment managers invest primarily for pension funds, endowments, foundations and other institutions. The Fund’s investment advisor is ALPS Advisors, Inc.
StoneCastle Financial Company Profile
StoneCastle Financial Corp. is a non-diversified, closed-end management investment company. The Company’s primary investment objective is to provide stockholders with current income, and to a lesser extent capital appreciation. The Company generally invests in the senior debt, subordinated debt, preferred shares and common stock of community banks. The Company’s investment portfolio includes term loans, debt securities, trust preferred securities, preferred shares of credit securitization, preferred securities, convertible preferred stock, common stock, exchange traded fund, limited partnership interest and money market fund. The Company invests in bank issuers of various locations, such as California, Colorado, Florida, Georgia, Illinois, Kansas, Maine, Maryland, New Jersey, New York, Ohio, North Carolina, Oklahoma, South Carolina, Texas and West Virginia.
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