Reviewing Monroe Capital (NASDAQ:MRCC) & Brookfield Asset Management (NYSE:BAM)

Brookfield Asset Management (NYSE:BAM) and Monroe Capital (NASDAQ:MRCC) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, earnings, profitability, institutional ownership, valuation and risk.

Risk & Volatility

Brookfield Asset Management has a beta of 1.42, suggesting that its stock price is 42% more volatile than the S&P 500. Comparatively, Monroe Capital has a beta of 1.03, suggesting that its stock price is 3% more volatile than the S&P 500.

Dividends

Brookfield Asset Management pays an annual dividend of $1.52 per share and has a dividend yield of 2.7%. Monroe Capital pays an annual dividend of $1.00 per share and has a dividend yield of 11.9%. Brookfield Asset Management pays out 134.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Monroe Capital pays out 166.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Brookfield Asset Management and Monroe Capital, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Brookfield Asset Management	2	5	5	0	2.25
Monroe Capital	0	0	1	0	3.00

Brookfield Asset Management presently has a consensus target price of $53.46, suggesting a potential downside of 6.64%. Monroe Capital has a consensus target price of $9.00, suggesting a potential upside of 6.89%. Given Monroe Capital’s stronger consensus rating and higher probable upside, analysts clearly believe Monroe Capital is more favorable than Brookfield Asset Management.

Earnings & Valuation

This table compares Brookfield Asset Management and Monroe Capital”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Brookfield Asset Management	$4.06 billion	6.24	$451.00 million	$1.13	50.67
Monroe Capital	$64.30 million	N/A	$370,000.00	$0.60	14.03

Brookfield Asset Management has higher revenue and earnings than Monroe Capital. Monroe Capital is trading at a lower price-to-earnings ratio than Brookfield Asset Management, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Brookfield Asset Management and Monroe Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Brookfield Asset Management	49.69%	85.03%	61.67%
Monroe Capital	20.97%	12.14%	4.75%

Insider and Institutional Ownership

68.4% of Brookfield Asset Management shares are held by institutional investors. 3.6% of Monroe Capital shares are held 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.

Summary

Brookfield Asset Management beats Monroe Capital on 11 of the 15 factors compared between the two stocks.

About Brookfield Asset Management

Brookfield Asset Management Ltd. is a real estate investment firm specializing in alternative asset management services. Its renewable power and transition business includes the operates in the hydroelectric, wind, solar, distributed generation, and sustainable solution sector. The company's infrastructure business engages in the utilities, transport, midstream, and data infrastructure sectors. In addition, its private equity business offers industrial, infrastructure, and business services sectors; and real estate business, which includes housing, logistics, hospitality, science and innovation, office, and retail sectors. Further, it provides credit business; and insurance solution in the reinsurance, annuities, operating platform, and investment solutions sectors. Brookfield Asset Management Ltd. was incorporated in 2022 and is headquartered in Toronto, Canada.

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.