Head-To-Head Review: Morgan Stanley Direct Lending Fund (NYSE:MSDL) vs. Amalgamated Financial (NASDAQ:AMAL)

Morgan Stanley Direct Lending Fund (NYSE:MSDL) and Amalgamated Financial (NASDAQ:AMAL) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, earnings, risk, institutional ownership, profitability, analyst recommendations and valuation.

Insider and Institutional Ownership

75.9% of Amalgamated Financial shares are owned by institutional investors. 0.2% of Morgan Stanley Direct Lending Fund shares are owned by company insiders. Comparatively, 1.3% of Amalgamated Financial shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Morgan Stanley Direct Lending Fund and Amalgamated Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Morgan Stanley Direct Lending Fund	35.92%	10.21%	4.70%
Amalgamated Financial	22.97%	14.75%	1.30%

Valuation and Earnings

This table compares Morgan Stanley Direct Lending Fund and Amalgamated Financial”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Morgan Stanley Direct Lending Fund	$416.08 million	3.46	$215.56 million	$1.65	10.06
Amalgamated Financial	$323.80 million	3.10	$106.43 million	$3.32	10.11

Morgan Stanley Direct Lending Fund has higher revenue and earnings than Amalgamated Financial. Morgan Stanley Direct Lending Fund is trading at a lower price-to-earnings ratio than Amalgamated Financial, indicating that it is currently the more affordable of the two stocks.

Dividends

Morgan Stanley Direct Lending Fund pays an annual dividend of $2.00 per share and has a dividend yield of 12.0%. Amalgamated Financial pays an annual dividend of $0.56 per share and has a dividend yield of 1.7%. Morgan Stanley Direct Lending Fund pays out 121.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Amalgamated Financial pays out 16.9% of its earnings in the form of a dividend. Amalgamated Financial has raised its dividend for 4 consecutive years.

Risk & Volatility

Morgan Stanley Direct Lending Fund has a beta of 0.26, indicating that its share price is 74% less volatile than the S&P 500. Comparatively, Amalgamated Financial has a beta of 0.82, indicating that its share price is 18% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and price targets for Morgan Stanley Direct Lending Fund and Amalgamated Financial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Morgan Stanley Direct Lending Fund	0	6	1	0	2.14
Amalgamated Financial	0	2	1	0	2.33

Morgan Stanley Direct Lending Fund presently has a consensus target price of $17.58, suggesting a potential upside of 5.89%. Amalgamated Financial has a consensus target price of $33.50, suggesting a potential downside of 0.15%. Given Morgan Stanley Direct Lending Fund’s higher possible upside, analysts plainly believe Morgan Stanley Direct Lending Fund is more favorable than Amalgamated Financial.

Summary

Amalgamated Financial beats Morgan Stanley Direct Lending Fund on 9 of the 16 factors compared between the two stocks.

About Morgan Stanley Direct Lending Fund

Morgan Stanley Direct Lending Fund is a business development company. It is a non-diversified, externally managed specialty finance company focused on lending to middle-market companies. Morgan Stanley Direct Lending Fund is based in NEW YORK.

About Amalgamated Financial

Amalgamated Financial Corp. operates as the bank holding company for Amalgamated Bank that provides commercial and retail banking, investment management, and trust and custody services for commercial and retail customers in the United States. The company accepts various deposit products, including non-interest bearing accounts, interest-bearing demand products, savings accounts, money market accounts, NOW accounts, and certificates of deposit. It also provides various commercial loans comprising commercial and industrial, multifamily mortgage, and commercial real estate loans; residential mortgage loans; and retail loans, such as residential real estate, consumer solar, and consumer and other loans. In addition, the company offers online banking, bill payment, online cash management, and safe deposit box rental services; debit and ATM cards; and trust, custody, and investment management services comprising asset safekeeping, corporate actions, income collections, proxy, account transition, asset transfers, and conversion management services. Further, it provides investment products, such as funds spanning equity, fixed-income, real estate, and alternative investment products; and brokerage, asset management, and insurance products. Amalgamated Financial Corp. was founded in 1923 and is headquartered in New York, New York.