Solar Capital (NASDAQ:SLRC) and VanEck Vectors Biotech ETF (NASDAQ:BBH) Head-To-Head Analysis

VanEck Vectors Biotech ETF (NASDAQ:BBH) and Solar Capital (NASDAQ:SLRC) are both small-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, analyst recommendations, profitability, dividends, institutional ownership, risk and earnings.

Profitability

This table compares VanEck Vectors Biotech ETF and Solar Capital’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
VanEck Vectors Biotech ETF N/A N/A N/A
Solar Capital 46.58% 8.05% 4.38%

Risk & Volatility

VanEck Vectors Biotech ETF has a beta of 1.25, meaning that its share price is 25% more volatile than the S&P 500. Comparatively, Solar Capital has a beta of 0.75, meaning that its share price is 25% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and recommmendations for VanEck Vectors Biotech ETF and Solar Capital, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
VanEck Vectors Biotech ETF 0 0 0 0 N/A
Solar Capital 0 1 3 0 2.75

Solar Capital has a consensus target price of $22.38, suggesting a potential upside of 8.99%. Given Solar Capital’s higher probable upside, analysts plainly believe Solar Capital is more favorable than VanEck Vectors Biotech ETF.

Dividends

VanEck Vectors Biotech ETF pays an annual dividend of $0.55 per share and has a dividend yield of 0.4%. Solar Capital pays an annual dividend of $1.64 per share and has a dividend yield of 8.0%. Solar Capital pays out 92.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Earnings and Valuation

This table compares VanEck Vectors Biotech ETF and Solar Capital’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
VanEck Vectors Biotech ETF N/A N/A N/A N/A N/A
Solar Capital $153.53 million 5.65 $66.87 million $1.77 11.60

Solar Capital has higher revenue and earnings than VanEck Vectors Biotech ETF.

Institutional and Insider Ownership

20.9% of VanEck Vectors Biotech ETF shares are owned by institutional investors. Comparatively, 58.1% of Solar Capital shares are owned by institutional investors. 5.9% of Solar Capital shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

Solar Capital beats VanEck Vectors Biotech ETF on 9 of the 11 factors compared between the two stocks.

About Solar Capital

Solar Capital Ltd. is a business development company specializing in secured debt (first lien unitranche and second lien), subordinated (unsecured) debt, minority equity, and strategic income-oriented control equity investments in leveraged middle market companies. The fund invests in aerospace and defense; air freight & logistics; asset management; automotive; banking; beverage, food and tobacco; building products; buildings and real estate; broadcasting and entertainment; cargo transport; commercial services and supplies; communications equipment; chemicals, plastics and rubber; containers, packaging and glass; construction & engineering; diversified/conglomerate manufacturing; consumer Finance; distributors; diversified/conglomerate services; diversified financial services; diversified real estate sctivities; food products; Footwear; Education Services; diversified telecommunications services; electronics; farming and agriculture; finance; grocery; health care equipment and supplies; health care facilities; education and childcare; home and office furnishing, durable consumer products; hotels, motels, inns and gaming; insurance; restaurants, leisure, amusement, and entertainment; leisure equipment tolls and services, media, multiline retail, multi sector holdings; paper and forest products; personal products; professional services, research and consulting services, software; specialty retail; textiles apparel and luxury goods, thrifts and mortgage finance, trading companies and distributors, utilities, and wireless telecommunication services; industrial conglomerates; internet software and services, IT services, machinery; mining, steel, iron, and non precious metals; oil and gas; personal, food and miscellaneous services; printing and publishing; retail stores; telecommunications; textiles and leather; and utilities. It also invests in life sciences with focus on specialty pharmaceuticals, medical devices, biotech, health Care Providers and services; health Care technology, enabling technologies and tools. The fund primarily invests in United States. The fund's investments generally range between $5 million and $100 million. The fund invests in companies with revenues between $50 million and $1 billion and EBITDA between $15 million and $100 million. It invests in the form of senior secured loans, mezzanine loans, and equity securities. It may also seek investments in thinly traded public companies and also make secondary investments. The fund makes non-control equity investments. It primarily exits within three years of the initial capital commitment.

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