Financial Survey: PennantPark Floating Rate Capital (NYSE:PFLT) and Virtus Dividend, Interest & Premium Strategy Fund (NYSE:NFJ)

PennantPark Floating Rate Capital (NYSE:PFLT) and Virtus Dividend, Interest & Premium Strategy Fund (NYSE:NFJ) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, valuation, analyst recommendations, dividends, institutional ownership, risk and earnings.

Analyst Ratings

This is a breakdown of recent ratings and price targets for PennantPark Floating Rate Capital and Virtus Dividend, Interest & Premium Strategy Fund, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PennantPark Floating Rate Capital	0	1	1	0	2.50
Virtus Dividend, Interest & Premium Strategy Fund	0	0	0	0	0.00

PennantPark Floating Rate Capital currently has a consensus target price of $10.50, indicating a potential upside of 10.06%. Given PennantPark Floating Rate Capital’s stronger consensus rating and higher probable upside, equities analysts plainly believe PennantPark Floating Rate Capital is more favorable than Virtus Dividend, Interest & Premium Strategy Fund.

Valuation and Earnings

This table compares PennantPark Floating Rate Capital and Virtus Dividend, Interest & Premium Strategy Fund”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PennantPark Floating Rate Capital	$261.43 million	3.62	$66.36 million	$0.73	13.07
Virtus Dividend, Interest & Premium Strategy Fund	$66.89 million	N/A	N/A	N/A	N/A

PennantPark Floating Rate Capital has higher revenue and earnings than Virtus Dividend, Interest & Premium Strategy Fund.

Profitability

This table compares PennantPark Floating Rate Capital and Virtus Dividend, Interest & Premium Strategy Fund’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
PennantPark Floating Rate Capital	25.39%	9.91%	4.05%
Virtus Dividend, Interest & Premium Strategy Fund	N/A	N/A	N/A

Insider and Institutional Ownership

19.8% of PennantPark Floating Rate Capital shares are owned by institutional investors. 1.0% of PennantPark Floating Rate Capital shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Dividends

PennantPark Floating Rate Capital pays an annual dividend of $1.23 per share and has a dividend yield of 12.9%. Virtus Dividend, Interest & Premium Strategy Fund pays an annual dividend of $1.52 per share and has a dividend yield of 11.5%. PennantPark Floating Rate Capital pays out 168.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

PennantPark Floating Rate Capital beats Virtus Dividend, Interest & Premium Strategy Fund on 10 of the 11 factors compared between the two stocks.

About PennantPark Floating Rate Capital

PennantPark Floating Rate Capital Ltd. is a business development company. It seeks to make secondary direct, debt, equity, and loan investments. The fund seeks to invest through floating rate loans in private or thinly traded or small market-cap, public middle market companies. It primarily invests in the United States and to a limited extent non-U.S. companies. The fund typically invests between $2 million and $20 million. The fund also invests in equity securities, such as preferred stock, common stock, warrants or options received in connection with debt investments or through direct investments. It primarily invests between $10 million and $50 million in investments in senior secured loans and mezzanine debt. It seeks to invest in companies not rated by national rating agencies. The companies if rated would be between BB and CCC under the Standard & Poor’s system. The fund invests 30% is invested in non-qualifying assets like investments in public companies whose securities are not thinly traded or do not have a market capitalization of less than $250 million, securities of middle-market companies located outside of the United States, high-yield bonds, distressed debt, private equity, securities of public companies that are not thinly traded, and investment companies as defined in the 1940 Act. Under normal conditions, the fund expects atleast 80 percent of its net assets plus any borrowings for investment purposes to be invested in Floating Rate Loans and investments with similar economic characteristics, including cash equivalents invested in money market funds. It expects to represent 65 percent of its portfolio through senior secured loans. In case of floating rate loans, it holds investments for a period of three to ten years.

About Virtus Dividend, Interest & Premium Strategy Fund

AllianzGI NFJ Dividend, Interest & Premium Strategy Fund is a closed ended equity mutual fund launched and managed by Allianz Global Investors Fund Management LLC. The fund is co-managed by Allianz Global Investors U.S. LLC and NFJ Investment Group LLC. It invests in public equity markets of the United States. The fund invests in the stocks of companies operating across diversified sectors. It primarily invests in dividend-paying stocks of companies. The fund employs a combination of fundamental research with bottom up stock picking approach and quantitative analysis to create its portfolio. It was formerly known as NFJ Dividend, Interest & Premium Strategy Fund. AllianzGI NFJ Dividend, Interest & Premium Strategy Fund was formed on February 28, 2005 and is domiciled in the United States.