Head-To-Head Comparison: Main Street Capital (MAIN) versus Its Competitors

Main Street Capital (NYSE: MAIN) is one of 56 public companies in the “Eating places” industry, but how does it contrast to its competitors? We will compare Main Street Capital to similar businesses based on the strength of its profitability, institutional ownership, valuation, dividends, analyst recommendations, risk and earnings.

Risk & Volatility

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Main Street Capital has a beta of 0.93, meaning that its share price is 7% less volatile than the S&P 500. Comparatively, Main Street Capital’s competitors have a beta of 0.55, meaning that their average share price is 45% less volatile than the S&P 500.

Valuation and Earnings

This table compares Main Street Capital and its competitors top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Main Street Capital $205.74 million $170.62 million 15.61
Main Street Capital Competitors $1.91 billion $184.64 million 18.64

Main Street Capital’s competitors have higher revenue and earnings than Main Street Capital. Main Street Capital is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Main Street Capital and its competitors, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Main Street Capital 1 3 2 0 2.17
Main Street Capital Competitors 523 2626 2951 120 2.43

Main Street Capital presently has a consensus target price of $38.25, suggesting a potential upside of 2.55%. As a group, “Eating places” companies have a potential upside of 9.34%. Given Main Street Capital’s competitors stronger consensus rating and higher probable upside, analysts clearly believe Main Street Capital has less favorable growth aspects than its competitors.

Dividends

Main Street Capital pays an annual dividend of $2.28 per share and has a dividend yield of 6.1%. Main Street Capital pays out 95.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Eating places” companies pay a dividend yield of 2.3% and pay out 50.5% of their earnings in the form of a dividend. Main Street Capital has raised its dividend for 7 consecutive years.

Institutional and Insider Ownership

27.6% of Main Street Capital shares are owned by institutional investors. Comparatively, 67.4% of shares of all “Eating places” companies are owned by institutional investors. 5.3% of Main Street Capital shares are owned by insiders. Comparatively, 17.1% of shares of all “Eating places” companies are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares Main Street Capital and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Main Street Capital 82.93% 10.34% 6.17%
Main Street Capital Competitors 3.91% -3.22% 5.31%

Summary

Main Street Capital competitors beat Main Street Capital on 10 of the 15 factors compared.

Main Street Capital Company Profile

Main Street Capital Corporation is a business development company specializing in long- term equity and debt investments in small and lower middle market companies. The firm focuses on investments in, subordinated loans, private equity, venture debt, mezzanine investments, mature, mid venture, industry consolidation, later stage, late venture, emerging growth, management buyouts, change of control transactions, ownership transitions, recapitalizations, strategic acquisitions, refinancing, business expansion capital, growth financings, family estate planning, and other growth initiatives primarily for later stage businesses. It invests in consumer discretionary, consumer staples, energy, healthcare, industrials, information technology, materials, telecommunication services, and utilities sectors. It does not seek to invest in start-up companies or companies with speculative business plans. It seeks to invest in traditional or basic businesses. The firm primarily invests in companies based in the Southern, South Central, and Southwestern regions of the United States but also considers other domestic investment opportunities. It typically invests between $2 million and $75 million in equity and $5 million to $50 million in debt, revenue between $10 million and $150 million, enterprise value between $3 million and $50 million, and EBITDA between $1 million and $20 million. The firm seeks to charge a fixed interest rate between 12 percent and 14 percent, payable in cash, in case of its mezzanine loan investments. The firm typically invests in the form of term debt with equity participation and/or direct equity investments. It prefers to maintain fully diluted minority and majority equity positions in its portfolio companies of 5 percent to 50 percent, and may have controlling interests in some instances. The firm also co-invests with other investment firms. It seeks to exit its debt investments through the repayment of the investment from internally generated cash flow and/or refinancing within a period of three to seven years. It participates in warrants, PIK (Payment in Kind) interest, convertible securities, junior secured or unsecured, senior secured debt, unitranche debt, equity related, common equity, and preferred equity. Main Street Capital Corporation was incorporated on March 9, 2007 and is based at Houston, Texas.

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