Monroe Capital (MRCC) versus The Competition Critical Survey

Monroe Capital (NASDAQ: MRCC) is one of 52 publicly-traded companies in the “Investment advice” industry, but how does it weigh in compared to its peers? We will compare Monroe Capital to similar businesses based on the strength of its institutional ownership, profitability, risk, earnings, analyst recommendations, valuation and dividends.

Profitability

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This table compares Monroe Capital and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Monroe Capital 23.78% 9.58% 5.60%
Monroe Capital Competitors 12.38% 28.06% 10.28%

Earnings and Valuation

This table compares Monroe Capital and its peers revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Monroe Capital $51.11 million $12.15 million 8.88
Monroe Capital Competitors $2.42 billion $277.86 million 14.48

Monroe Capital’s peers have higher revenue and earnings than Monroe Capital. Monroe Capital is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Institutional & Insider Ownership

28.5% of Monroe Capital shares are owned by institutional investors. Comparatively, 48.2% of shares of all “Investment advice” companies are owned by institutional investors. 1.8% of Monroe Capital shares are owned by company insiders. Comparatively, 20.7% of shares of all “Investment advice” companies are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and price targets for Monroe Capital and its peers, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Monroe Capital 0 1 2 0 2.67
Monroe Capital Competitors 327 1722 2142 114 2.47

Monroe Capital presently has a consensus price target of $15.50, suggesting a potential upside of 24.70%. As a group, “Investment advice” companies have a potential upside of 15.39%. Given Monroe Capital’s stronger consensus rating and higher possible upside, analysts plainly believe Monroe Capital is more favorable than its peers.

Risk & Volatility

Monroe Capital has a beta of 0.6, suggesting that its share price is 40% less volatile than the S&P 500. Comparatively, Monroe Capital’s peers have a beta of 1.21, suggesting that their average share price is 21% more volatile than the S&P 500.

Dividends

Monroe Capital pays an annual dividend of $1.40 per share and has a dividend yield of 11.3%. Monroe Capital pays out 100.0% 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, “Investment advice” companies pay a dividend yield of 3.6% and pay out 47.5% of their earnings in the form of a dividend.

Summary

Monroe Capital peers beat Monroe Capital on 10 of the 15 factors compared.

Monroe Capital Company Profile

Monroe Capital Corporation is a closed-end, non-diversified management investment company. The Company is a specialty finance company focused on providing financing primarily to lower middle-market companies in the United States and Canada. The Company’s investment objective is to maximize the total return to its stockholders in the form of current income and capital appreciation primarily through investments in senior, unitranche and junior secured debt, and unsecured subordinated debt and equity. The Company provides customized financing solutions focused primarily on senior secured, junior secured and unitranche (a combination of senior secured and junior secured debt in the same facility) debt, and subordinated debt and equity, including equity co-investments in preferred and common stock and warrants. The Company’s investment activities are managed by its investment advisor, Monroe Capital BDC Advisors, LLC (MC Advisors).

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