Critical Contrast: Garrison Capital (GARS) vs. Gladstone Investment (GAIN)

Garrison Capital (NASDAQ: GARS) and Gladstone Investment (NASDAQ:GAIN) are both small-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their risk, valuation, dividends, analyst recommendations, earnings, profitability and institutional ownership.

Dividends

Garrison Capital pays an annual dividend of $1.12 per share and has a dividend yield of 13.2%. Gladstone Investment pays an annual dividend of $0.80 per share and has a dividend yield of 6.8%. Garrison Capital pays out 104.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Gladstone Investment pays out 97.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Ratings

This is a summary of current recommendations for Garrison Capital and Gladstone Investment, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Garrison Capital 0 0 2 0 3.00
Gladstone Investment 0 1 2 0 2.67

Garrison Capital presently has a consensus target price of $10.50, suggesting a potential upside of 23.82%. Gladstone Investment has a consensus target price of $10.50, suggesting a potential downside of 10.64%. Given Garrison Capital’s stronger consensus rating and higher possible upside, research analysts clearly believe Garrison Capital is more favorable than Gladstone Investment.

Institutional & Insider Ownership

25.9% of Garrison Capital shares are held by institutional investors. Comparatively, 15.3% of Gladstone Investment shares are held by institutional investors. 6.4% of Garrison Capital shares are held by company insiders. Comparatively, 2.4% of Gladstone Investment shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Volatility & Risk

Garrison Capital has a beta of 0.2, indicating that its stock price is 80% less volatile than the S&P 500. Comparatively, Gladstone Investment has a beta of 0.53, indicating that its stock price is 47% less volatile than the S&P 500.

Profitability

This table compares Garrison Capital and Gladstone Investment’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Garrison Capital 32.34% 9.58% 4.38%
Gladstone Investment 104.00% 7.64% 4.61%

Valuation & Earnings

This table compares Garrison Capital and Gladstone Investment’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Garrison Capital $36.62 million 3.72 $6.22 million $1.07 7.93
Gladstone Investment $58.35 million 6.61 $60.68 million $0.82 14.33

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

Summary

Gladstone Investment beats Garrison Capital on 8 of the 15 factors compared between the two stocks.

Garrison Capital Company Profile

Garrison Capital Inc. is a managed, closed-end, non-diversified management investment company. The Company’s investment objective is to generate current income and capital appreciation by making investments primarily in debt securities and loans of the United States-based middle-market companies, which it defines as those having annual earnings before interest, taxes and depreciation, or EBITDA, of certain amount. It invests or provides direct lending in first lien senior secured loans, second lien senior secured loans, one-stop senior secured loans or unitranche loans, subordinated or mezzanine loans, unsecured consumer loans and to a lesser extent, selected equity co-investments in middle-market companies. The Company intends to generate risk-adjusted net returns by assembling a portfolio of investments. The Company’s investment advisor is Garrison Capital Advisers LLC.

Gladstone Investment Company Profile

Gladstone Investment Corporation is an externally managed, closed-end, non-diversified management investment company. The Company’s investment objectives are to achieve and grow current income by investing in debt securities of established businesses that it believes will provide stable earnings and cash flow to pay expenses, make principal and interest payments on its outstanding indebtedness and make distributions to stockholders that grow over time, and provide its stockholders with long-term capital appreciation in the value of its assets by investing in equity securities, generally in combination with the aforementioned debt securities, of businesses that it believes can grow over time to permit it to sell its equity investments for capital gains. It has investments in sectors, such as chemicals, plastics, and rubber, and home and office furnishings, house wares, and durable consumer products, among others. Its investment advisor is Gladstone Management Corporation.

Receive News & Ratings for Garrison Capital Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Garrison Capital and related companies with MarketBeat.com's FREE daily email newsletter.


Leave a Reply