Critical Review: TICC Capital Corp. (TICC) & MFS Charter Income Trust (MCR)

TICC Capital Corp. (NASDAQ: TICC) and MFS Charter Income Trust (NYSE:MCR) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, profitability, risk, dividends, earnings and analyst recommendations.

Analyst Ratings

This is a summary of current ratings and price targets for TICC Capital Corp. and MFS Charter Income Trust, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TICC Capital Corp. 3 0 0 0 1.00
MFS Charter Income Trust 0 0 0 0 N/A

TICC Capital Corp. presently has a consensus target price of $6.00, suggesting a potential downside of 13.04%. Given TICC Capital Corp.’s higher possible upside, equities analysts plainly believe TICC Capital Corp. is more favorable than MFS Charter Income Trust.

Dividends

TICC Capital Corp. pays an annual dividend of $0.80 per share and has a dividend yield of 11.6%. MFS Charter Income Trust does not pay a dividend. TICC Capital Corp. pays out 45.2% of its earnings in the form of a dividend.

Insider and Institutional Ownership

17.5% of TICC Capital Corp. shares are owned by institutional investors. 5.9% of TICC Capital Corp. shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares TICC Capital Corp. and MFS Charter Income Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
TICC Capital Corp. 142.50% 7.50% 4.53%
MFS Charter Income Trust N/A N/A N/A

Valuation and Earnings

This table compares TICC Capital Corp. and MFS Charter Income Trust’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
TICC Capital Corp. $70.44 million 5.04 $91.12 million $1.77 3.90
MFS Charter Income Trust N/A N/A N/A N/A N/A

TICC Capital Corp. has higher revenue and earnings than MFS Charter Income Trust.

Summary

TICC Capital Corp. beats MFS Charter Income Trust on 8 of the 9 factors compared between the two stocks.

TICC Capital Corp. Company Profile

TICC Capital Corp. is a closed-end, non-diversified management investment company. The Company’s investment objective is to maximize its portfolio’s total return. The Company primarily focuses on seeking current income by investing primarily in corporate debt securities. The Company’s debt investments may include syndicated loans and bilateral loans. The Company holds interests in structured finance investments, including collateralized loan obligation (CLO) investment vehicles that own debt securities. CLO investments may also include warehouse facilities, which are financing structures intended to aggregate loans that may be used to form the basis of a CLO vehicle. The Company may also invest in publicly traded debt and/or equity securities. Its portfolio includes its investments in various industries, such as structured finance, telecommunication services, business services, printing and publishing, and financial intermediaries. TICC Management, LLC is its investment advisor.

MFS Charter Income Trust Company Profile

MFS Charter Income Trust (Fund) is a diversified closed-end management investment company. The Fund’s investment objective is to seek high current income, but may also consider capital appreciation. The Fund normally invests in debt instruments. The Fund also invests in corporate bonds of the United States and/or foreign issuers, the United States Government securities, foreign government securities, mortgage-backed and other asset-backed securities and/or debt instruments of issuers located in emerging market countries. The Fund’s portfolio comprises bonds, floating rate loans, equities, cash and cash equivalent and other. It invests in a range of Fixed income sectors, such as high yield corporates non-united states government bonds, investment grade corporates, emerging markets bonds, commercial mortgage-backed securities, asset-backed securities and collateralized debt obligations. Massachusetts Financial Services Company is the Fund’s investment advisor.

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