J Alexanders (NYSE:JAX) and Main Street Capital (NYSE:MAIN) are both retail/wholesale companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, risk, institutional ownership, valuation, dividends and earnings.
Volatility & Risk
J Alexanders has a beta of 0.77, suggesting that its stock price is 23% less volatile than the S&P 500. Comparatively, Main Street Capital has a beta of 0.85, suggesting that its stock price is 15% less volatile than the S&P 500.
This is a summary of recent recommendations for J Alexanders and Main Street Capital, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Main Street Capital||0||2||1||0||2.33|
Main Street Capital has a consensus price target of $38.00, indicating a potential downside of 7.09%. Given Main Street Capital’s higher probable upside, analysts plainly believe Main Street Capital is more favorable than J Alexanders.
This table compares J Alexanders and Main Street Capital’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Main Street Capital||73.33%||10.70%||6.28%|
Main Street Capital pays an annual dividend of $2.46 per share and has a dividend yield of 6.0%. J Alexanders does not pay a dividend. Main Street Capital pays out 94.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Main Street Capital has increased its dividend for 8 consecutive years.
Insider & Institutional Ownership
74.0% of J Alexanders shares are owned by institutional investors. Comparatively, 22.5% of Main Street Capital shares are owned by institutional investors. 16.5% of J Alexanders shares are owned by insiders. Comparatively, 5.4% of Main Street Capital shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Valuation & Earnings
This table compares J Alexanders and Main Street Capital’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|J Alexanders||$242.26 million||0.62||$4.00 million||$0.60||17.08|
|Main Street Capital||$233.35 million||10.99||$168.21 million||$2.60||15.73|
Main Street Capital has lower revenue, but higher earnings than J Alexanders. Main Street Capital is trading at a lower price-to-earnings ratio than J Alexanders, indicating that it is currently the more affordable of the two stocks.
Main Street Capital beats J Alexanders on 11 of the 16 factors compared between the two stocks.
J Alexanders Company Profile
J. Alexander's Holdings, Inc., through its subsidiaries, owns and operates complementary upscale dining restaurants in the United States. It operates restaurants under various concepts, including J. Alexander's, Redlands Grill, Lyndhurst Grill, Overland Park Grill, and River Steakhouse and Grill. The company's restaurants offer American menu. As of April 29, 2019, it operated 46 restaurants in 16 states. J. Alexander's Holdings, Inc. was founded in 1970 and is headquartered in Nashville, Tennessee.
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, manufacturing, media, 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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