Critical Comparison: MSC Income Fund (NYSE:MSIF) versus Carlyle Secured Lending (NASDAQ:CGBD)

Carlyle Secured Lending (NASDAQ:CGBD) and MSC Income Fund (NYSE:MSIF) are both small-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, earnings, profitability, valuation, analyst recommendations, institutional ownership and risk.

Profitability

This table compares Carlyle Secured Lending and MSC Income Fund’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Carlyle Secured Lending	14.26%	8.85%	3.90%
MSC Income Fund	N/A	N/A	N/A

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Carlyle Secured Lending and MSC Income Fund, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Carlyle Secured Lending	0	4	1	1	2.50
MSC Income Fund	0	3	2	1	2.67

Carlyle Secured Lending currently has a consensus target price of $11.33, suggesting a potential upside of 6.32%. MSC Income Fund has a consensus target price of $13.88, suggesting a potential upside of 17.98%. Given MSC Income Fund’s stronger consensus rating and higher possible upside, analysts plainly believe MSC Income Fund is more favorable than Carlyle Secured Lending.

Institutional & Insider Ownership

24.5% of Carlyle Secured Lending shares are owned by institutional investors. 0.3% of Carlyle Secured Lending shares are owned by insiders. Comparatively, 0.5% of MSC Income Fund shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Carlyle Secured Lending and MSC Income Fund”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Carlyle Secured Lending	$255.57 million	2.87	$69.97 million	$0.51	20.90
MSC Income Fund	$110.26 million	5.03	$100.90 million	$2.14	5.50

MSC Income Fund has lower revenue, but higher earnings than Carlyle Secured Lending. MSC Income Fund is trading at a lower price-to-earnings ratio than Carlyle Secured Lending, indicating that it is currently the more affordable of the two stocks.

Summary

MSC Income Fund beats Carlyle Secured Lending on 7 of the 13 factors compared between the two stocks.

About Carlyle Secured Lending

Carlyle Secured Lending, Inc. is business development company specializing in first lien debt, senior secured loans, second lien senior secured loan unsecured debt, mezzanine debt and investments in equities. It specializes in directly investing. It specializes in middle market. It targets healthcare and pharmaceutical, aerospace and defense, high tech industries, business services, software, beverage food and tobacco, hotel gamming and leisure, banking finance insurance and in real estate sector. The fund seeks to invest across United States of America, Luxembourg, Cayman Islands, Cyprus, and United Kingdom. It invests in companies with EBITDA between $25 million and $100 million.