Analyzing Solar Senior Capital (SUNS) & BlackRock Inv. Quality Munic. Trust (BKN)

Solar Senior Capital (NASDAQ:SUNS) and BlackRock Inv. Quality Munic. Trust (NYSE:BKN) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, analyst recommendations, institutional ownership, dividends, valuation and profitability.

Analyst Recommendations

This is a summary of current recommendations for Solar Senior Capital and BlackRock Inv. Quality Munic. Trust, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Solar Senior Capital 0 0 1 0 3.00
BlackRock Inv. Quality Munic. Trust 0 0 0 0 N/A

Solar Senior Capital presently has a consensus price target of $18.50, indicating a potential upside of 9.27%. Given Solar Senior Capital’s higher probable upside, analysts clearly believe Solar Senior Capital is more favorable than BlackRock Inv. Quality Munic. Trust.

Volatility & Risk

Solar Senior Capital has a beta of 0.59, meaning that its share price is 41% less volatile than the S&P 500. Comparatively, BlackRock Inv. Quality Munic. Trust has a beta of 0.12, meaning that its share price is 88% less volatile than the S&P 500.

Dividends

Solar Senior Capital pays an annual dividend of $1.41 per share and has a dividend yield of 8.3%. BlackRock Inv. Quality Munic. Trust pays an annual dividend of $0.68 per share and has a dividend yield of 4.6%. Solar Senior Capital pays out 100.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Solar Senior Capital has raised its dividend for 3 consecutive years. Solar Senior Capital is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider and Institutional Ownership

20.9% of Solar Senior Capital shares are held by institutional investors. Comparatively, 18.8% of BlackRock Inv. Quality Munic. Trust shares are held by institutional investors. 5.7% of Solar Senior Capital shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Solar Senior Capital and BlackRock Inv. Quality Munic. Trust’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Solar Senior Capital $39.81 million 6.82 $13.81 million $1.41 12.01
BlackRock Inv. Quality Munic. Trust N/A N/A N/A N/A N/A

Solar Senior Capital has higher revenue and earnings than BlackRock Inv. Quality Munic. Trust.

Profitability

This table compares Solar Senior Capital and BlackRock Inv. Quality Munic. Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Solar Senior Capital 38.53% 8.50% 4.60%
BlackRock Inv. Quality Munic. Trust N/A N/A N/A

Summary

Solar Senior Capital beats BlackRock Inv. Quality Munic. Trust on 11 of the 12 factors compared between the two stocks.

About Solar Senior Capital

Solar Senior Capital Ltd. is a business development company specializing in investments in leveraged, middle-market companies in the United States. The fund invests in the form of senior secured loans, including first lien, unitranche, and second lien debt instruments. It does not invest in start-up companies or companies having speculative business plans. The fund prefers debt investments between $5 million and $30 million in companies with EBITDA between $20 million and $60 million.

About BlackRock Inv. Quality Munic. Trust

BlackRock Investment Quality Municipal Trust Inc. is a closed ended fixed income mutual fund launched by BlackRock, Inc. It is managed by BlackRock Advisors, LLC. The fund invests in fixed income markets. It invests primarily in investment grade municipal bonds municipal obligations exempt from federal income taxes. Blackrock Investment Quality Municipal Trust Inc. was formed on February 28, 1993 and is domiciled in United States.

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