Comparing WhiteHorse Finance (WHF) & Eaton Vance Floating-Rate Income Trust (EFT)

Eaton Vance Floating-Rate Income Trust (NYSE: EFT) and WhiteHorse Finance (NASDAQ:WHF) are both small-cap financials companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, earnings, analyst recommendations, institutional ownership, valuation, risk and profitability.

Profitability

This table compares Eaton Vance Floating-Rate Income Trust and WhiteHorse Finance’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Eaton Vance Floating-Rate Income Trust N/A N/A N/A
WhiteHorse Finance 64.58% 9.69% 5.54%

Analyst Ratings

This is a breakdown of recent ratings and target prices for Eaton Vance Floating-Rate Income Trust and WhiteHorse Finance, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Eaton Vance Floating-Rate Income Trust 0 0 0 0 N/A
WhiteHorse Finance 0 1 1 0 2.50

WhiteHorse Finance has a consensus price target of $15.00, indicating a potential upside of 5.26%. Given WhiteHorse Finance’s higher possible upside, analysts clearly believe WhiteHorse Finance is more favorable than Eaton Vance Floating-Rate Income Trust.

Dividends

WhiteHorse Finance pays an annual dividend of $1.42 per share and has a dividend yield of 10.0%. Eaton Vance Floating-Rate Income Trust does not pay a dividend. WhiteHorse Finance pays out 76.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Volatility and Risk

Eaton Vance Floating-Rate Income Trust has a beta of 0.39, suggesting that its share price is 61% less volatile than the S&P 500. Comparatively, WhiteHorse Finance has a beta of 0.74, suggesting that its share price is 26% less volatile than the S&P 500.

Valuation & Earnings

This table compares Eaton Vance Floating-Rate Income Trust and WhiteHorse Finance’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Eaton Vance Floating-Rate Income Trust N/A N/A N/A N/A N/A
WhiteHorse Finance $53.85 million 5.43 $31.32 million $1.86 7.66

WhiteHorse Finance has higher revenue and earnings than Eaton Vance Floating-Rate Income Trust.

Insider and Institutional Ownership

9.2% of WhiteHorse Finance shares are held by institutional investors. 1.4% of WhiteHorse Finance shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

WhiteHorse Finance beats Eaton Vance Floating-Rate Income Trust on 10 of the 11 factors compared between the two stocks.

Eaton Vance Floating-Rate Income Trust Company Profile

Eaton Vance Floating-Rate Income Trust (the Trust) is a diversified, closed-end management investment company. The Trust’s investment objective is to provide a high level of current income. The Trust will, as a secondary objective, also seek preservation of capital to the extent consistent with its primary goal of high current income. Normally, the Trust invests approximately 80% of its total assets in senior loans of domestic and foreign borrowers that are denominated in the United States dollars, euros, British pounds, Swiss francs, Canadian dollars and Australian dollars. The Trust invests in a range of sectors, including healthcare, electronics/electrical, business equipment and services, retailers (except food and drug), chemicals and plastics, food products, oil and gas, lodging and casinos, insurance, and leisure goods/activities/movies. Eaton Vance Management is the investment advisor of the Trust.

WhiteHorse Finance Company Profile

WhiteHorse Finance, Inc. is a non-diversified, closed-end management investment company. The Company is a direct lender targeting debt investments in privately held, small-cap companies located in the United States. The Company’s investment objective is to generate attractive risk-adjusted returns primarily by originating and investing in senior secured loans, including first lien and second lien facilities, to performing small-cap companies across a range of industries that typically carry a floating interest rate based on the London Interbank Offered Rate (LIBOR) and have a term of 3 to 6 years. The Company may also make investments at other levels of a company’s capital structure, including mezzanine loans or equity interests. The Company also may receive warrants to purchase common stock in connection with its debt investments. Its investment advisor is H.I.G. WhiteHorse Advisers, LLC.

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