Kayne Anderson Energy Development (NYSE: KED) and Gladstone Investment Corporation (NASDAQ:GAIN) are both small-cap closed end funds companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, valuation, dividends, institutional ownership, profitability, earnings and risk.
Risk & Volatility
Kayne Anderson Energy Development has a beta of 1.3, meaning that its share price is 30% more volatile than the S&P 500. Comparatively, Gladstone Investment Corporation has a beta of 0.71, meaning that its share price is 29% less volatile than the S&P 500.
Kayne Anderson Energy Development pays an annual dividend of $1.60 per share and has a dividend yield of 10.7%. Gladstone Investment Corporation pays an annual dividend of $0.78 per share and has a dividend yield of 7.1%. Kayne Anderson Energy Development pays out -2,285.7% of its earnings in the form of a dividend. Gladstone Investment Corporation pays out 57.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Kayne Anderson Energy Development is clearly the better dividend stock, given its higher yield and lower payout ratio.
Valuation & Earnings
This table compares Kayne Anderson Energy Development and Gladstone Investment Corporation’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Kayne Anderson Energy Development||N/A||N/A||N/A||($0.07)||-214.57|
|Gladstone Investment Corporation||$51.88 million||6.85||$44.76 million||$1.35||8.10|
Gladstone Investment Corporation has higher revenue and earnings than Kayne Anderson Energy Development. Kayne Anderson Energy Development is trading at a lower price-to-earnings ratio than Gladstone Investment Corporation, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
18.2% of Gladstone Investment Corporation shares are owned by institutional investors. 2.4% of Gladstone Investment Corporation 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.
This table compares Kayne Anderson Energy Development and Gladstone Investment Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Kayne Anderson Energy Development||-3,648.20%||-38.54%||-22.63%|
|Gladstone Investment Corporation||80.07%||6.95%||4.27%|
This is a breakdown of current ratings and recommmendations for Kayne Anderson Energy Development and Gladstone Investment Corporation, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Kayne Anderson Energy Development||0||0||1||0||3.00|
|Gladstone Investment Corporation||0||1||1||0||2.50|
Kayne Anderson Energy Development currently has a consensus target price of $20.00, indicating a potential upside of 33.16%. Gladstone Investment Corporation has a consensus target price of $10.00, indicating a potential downside of 8.51%. Given Kayne Anderson Energy Development’s stronger consensus rating and higher probable upside, research analysts clearly believe Kayne Anderson Energy Development is more favorable than Gladstone Investment Corporation.
Gladstone Investment Corporation beats Kayne Anderson Energy Development on 7 of the 12 factors compared between the two stocks.
Kayne Anderson Energy Development Company Profile
Kayne Anderson Energy Development Company is a non-diversified, closed-end fund. The Fund’s investment objective is to generate both current income and capital appreciation, through equity and debt investments. It seeks to achieve this objective by investing approximately 80% of its total assets in securities of companies that derive their revenue from activities in the energy industry, including midstream energy companies, which operates assets used to gather, transport, process, treat, terminal and store natural gas, natural gas liquids, crude oil or refined petroleum products; upstream energy companies, which are engaged in the exploration, extraction and production of natural resources, including natural gas, natural gas liquids and crude oil, from onshore and offshore geological reservoirs, and other energy companies, which are engaged in owning, leasing, managing, producing, processing and selling of coal and coal reserves. KA Fund Advisors, LLC is the advisor of the Fund.
Gladstone Investment Corporation 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.
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