MVC Capital (NYSE:MVC) and Templeton Global Income Fund (NYSE:GIM) Critical Analysis

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MVC Capital (NYSE:MVC) and Templeton Global Income Fund (NYSE:GIM) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, analyst recommendations, risk, institutional ownership, dividends, valuation and earnings.

Valuation & Earnings

This table compares MVC Capital and Templeton Global Income Fund’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
MVC Capital $22.89 million 7.31 -$10.53 million $0.20 47.20
Templeton Global Income Fund N/A N/A N/A N/A N/A

Templeton Global Income Fund has lower revenue, but higher earnings than MVC Capital.

Volatility & Risk

MVC Capital has a beta of 0.74, suggesting that its share price is 26% less volatile than the S&P 500. Comparatively, Templeton Global Income Fund has a beta of 0.41, suggesting that its share price is 59% less volatile than the S&P 500.

Profitability

This table compares MVC Capital and Templeton Global Income Fund’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
MVC Capital 17.72% 4.54% 2.84%
Templeton Global Income Fund N/A N/A N/A

Dividends

MVC Capital pays an annual dividend of $0.60 per share and has a dividend yield of 6.4%. Templeton Global Income Fund pays an annual dividend of $0.42 per share and has a dividend yield of 6.5%. MVC Capital pays out 300.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. MVC Capital has raised its dividend for 2 consecutive years.

Analyst Recommendations

This is a breakdown of current ratings and price targets for MVC Capital and Templeton Global Income Fund, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
MVC Capital 0 0 1 0 3.00
Templeton Global Income Fund 0 0 0 0 N/A

MVC Capital presently has a consensus price target of $13.00, indicating a potential upside of 37.71%. Given MVC Capital’s higher possible upside, equities analysts plainly believe MVC Capital is more favorable than Templeton Global Income Fund.

Insider and Institutional Ownership

49.3% of MVC Capital shares are held by institutional investors. Comparatively, 27.9% of Templeton Global Income Fund shares are held by institutional investors. 8.9% of MVC Capital shares are held by company insiders. Comparatively, 6.2% of Templeton Global Income Fund shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

MVC Capital beats Templeton Global Income Fund on 10 of the 12 factors compared between the two stocks.

MVC Capital Company Profile

MVC Capital, Inc. is a business development company specializing in equity, acquisition financing, mezzanine financing, management buyouts, leveraged buildups, corporate partnerships, PIPE transactions, going private transactions, private company recapitalizations, operational turnarounds, and growth and expansion capital transaction financing. The company seeks to invest in mature, small, and middle-market companies. It seeks to invest in companies in the consumer products, business services, industrial manufacturing and services, automotive retailing, energy, food and food service, financial services, insurance, industrial distribution and value-added distribution, medical devices and equipment, specialty chemicals, and security sectors. The company prefers to invest in companies based in the United States. The firm typically invests between $3 million and $25 million for control and non-control stakes in companies with revenues between $10 million and $150 million and EBITDA between $3 million and $25 million. It prefers to be the lead investor in transactions and also co-invests in companies with other private equity sponsors. The company invests in the form of preferred and common equity, and warrants or rights to acquire equity interests; bridge loans; term loans; debt; cash flow loans; senior and subordinated loans; convertible securities; venture capital; mezzanine; and private equity investments. It exits its investments in the form of maturity of loan, public offering, sale, mergers and acquisitions, and financial recapitalizations. It prefers to take majority stake in companies.

Templeton Global Income Fund Company Profile

Templeton Global Income Fund is a closed-ended fixed income mutual fund launched by Franklin Resources, Inc. It is managed by Franklin Advisers, Inc. The fund invests in fixed income markets across the globe. It primarily invests in government bonds. The fund is actively managed. It benchmarks the performance of its portfolio against the J.P. Morgan Global Government Bond Index. Templeton Global Income Fund was formed on March 17, 1988 and is domiciled in the United States.

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