Netcapital (NASDAQ:NCPL) versus Morgan Stanley Direct Lending Fund (NYSE:MSDL) Head-To-Head Analysis

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

Valuation and Earnings

This table compares Morgan Stanley Direct Lending Fund and Netcapital”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	$397.29 million	3.10	$122.09 million	$0.69	21.20
Netcapital	$870,000.00	6.68	-$28.30 million	($15.49)	-0.05

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

Analyst Recommendations

This is a summary of recent recommendations and price targets for Morgan Stanley Direct Lending Fund and Netcapital, 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
Netcapital	1	0	0	0	1.00

Morgan Stanley Direct Lending Fund currently has a consensus target price of $15.50, indicating a potential upside of 5.98%. Given Morgan Stanley Direct Lending Fund’s stronger consensus rating and higher probable upside, analysts plainly believe Morgan Stanley Direct Lending Fund is more favorable than Netcapital.

Volatility & Risk

Morgan Stanley Direct Lending Fund has a beta of 0.54, meaning that its share price is 46% less volatile than the S&P 500. Comparatively, Netcapital has a beta of 2.52, meaning that its share price is 152% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Morgan Stanley Direct Lending Fund	15.97%	9.61%	4.28%
Netcapital	-3,806.77%	-40.53%	-32.59%

Institutional & Insider Ownership

30.7% of Netcapital shares are owned by institutional investors. 0.3% of Morgan Stanley Direct Lending Fund shares are owned by insiders. Comparatively, 4.9% of Netcapital shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

Morgan Stanley Direct Lending Fund beats Netcapital on 10 of the 14 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 Netcapital

Netcapital Inc. operates as a fintech company. It offers Netcapital.com, an SEC-registered funding portal that enables private companies to raise capital online, as well as allows investors to invest from anywhere in the world. The company also provides various services, including automated onboarding process and filing of required regulatory documents; compliance review; custom-built offering page on its portal website; third party transfer agent and custodial services; and rolling closes which provides access to liquidity before final close date of offerings, as well as assistance with annual fillings and direct access to team for ongoing support. In addition, it offers advisor services, which includes incubation of technology start-ups; investors introduction; online marketing; website design and software development; message crafting including pitch decks, offering pages, and ad creation; strategic advice; and technology consulting services. Further, the company provides valuation services, such as business valuation, fairness and solvency opinions, ESOP feasibility and valuation, non-cash charitable contribution, economic analysis of damages, intellectual property appraisals, and compensation studies. Netcapital Inc. is based in Boston, Massachusetts.