Financial Survey: Sound Point Meridian Capital (NYSE:SPMC) versus Monroe Capital (NASDAQ:MRCC)

Sound Point Meridian Capital (NYSE:SPMC) and Monroe Capital (NASDAQ:MRCC) are both small-cap finance companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, institutional ownership, risk, valuation, earnings, profitability and analyst recommendations.

Dividends

Sound Point Meridian Capital pays an annual dividend of $3.00 per share and has a dividend yield of 33.5%. Monroe Capital pays an annual dividend of $0.36 per share and has a dividend yield of 8.0%. Sound Point Meridian Capital pays out -85.0% of its earnings in the form of a dividend. Monroe Capital pays out -156.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Profitability

This table compares Sound Point Meridian Capital and Monroe Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sound Point Meridian Capital	N/A	N/A	N/A
Monroe Capital	-13.52%	6.59%	2.88%

Risk and Volatility

Sound Point Meridian Capital has a beta of 0.68, indicating that its stock price is 32% less volatile than the S&P 500. Comparatively, Monroe Capital has a beta of 0.75, indicating that its stock price is 25% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and target prices for Sound Point Meridian Capital and Monroe Capital, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sound Point Meridian Capital	1	2	1	0	2.00
Monroe Capital	0	1	0	0	2.00

Sound Point Meridian Capital presently has a consensus target price of $16.10, suggesting a potential upside of 79.59%. Given Sound Point Meridian Capital’s higher possible upside, analysts clearly believe Sound Point Meridian Capital is more favorable than Monroe Capital.

Earnings & Valuation

This table compares Sound Point Meridian Capital and Monroe Capital”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sound Point Meridian Capital	N/A	N/A	N/A	($3.53)	-2.54
Monroe Capital	$286,000.00	340.90	-$5.12 million	($0.23)	-19.57

Sound Point Meridian Capital has higher earnings, but lower revenue than Monroe Capital. Monroe Capital is trading at a lower price-to-earnings ratio than Sound Point Meridian Capital, indicating that it is currently the more affordable of the two stocks.

Summary

Monroe Capital beats Sound Point Meridian Capital on 6 of the 11 factors compared between the two stocks.

About Sound Point Meridian Capital

Sound Point Meridian Capital Inc. is an externally managed, non-diversified closed-end management investment company. Its investment objective is to generate high current income, with a secondary objective to generate capital appreciation, by investing primarily in third-party collateralized loan obligation equity and mezzanine tranches. Sound Point Meridian Capital Inc. is based in NEW YORK.

About Monroe Capital

Monroe Capital Corporation is a business development company specializing in customized financing solutions in senior, unitranche and junior secured debt, subordinated debt financing and to a lesser extent, unsecured debt and equity, including equity co-investments in preferred and common stock and warrants. It also provides financing primarily to leveraged buyouts in lower middle-market companies. It focuses to invest in the United States and Canada. The fund prefers to invest in companies with EBITDA between $3 and $35 million. Its makes minority equity investments.