Head-To-Head Review: MidCap Financial Investment (NASDAQ:MFIC) versus Barings Corporate Investors (NYSE:MCI)

MidCap Financial Investment (NASDAQ:MFIC) and Barings Corporate Investors (NYSE:MCI) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, valuation, institutional ownership, risk, profitability, dividends and analyst recommendations.

Analyst Ratings

This is a breakdown of recent recommendations for MidCap Financial Investment and Barings Corporate Investors, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MidCap Financial Investment	0	2	3	0	2.60
Barings Corporate Investors	0	0	0	0	0.00

MidCap Financial Investment currently has a consensus target price of $14.50, indicating a potential upside of 23.93%. Given MidCap Financial Investment’s stronger consensus rating and higher possible upside, equities research analysts plainly believe MidCap Financial Investment is more favorable than Barings Corporate Investors.

Dividends

MidCap Financial Investment pays an annual dividend of $1.52 per share and has a dividend yield of 13.0%. Barings Corporate Investors pays an annual dividend of $1.59 per share and has a dividend yield of 7.5%. MidCap Financial Investment pays out 116.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Insider and Institutional Ownership

28.5% of MidCap Financial Investment shares are held by institutional investors. 1.1% of MidCap Financial Investment shares are held by insiders. Comparatively, 1.1% of Barings Corporate Investors shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Earnings & Valuation

This table compares MidCap Financial Investment and Barings Corporate Investors”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MidCap Financial Investment	$110.35 million	9.94	$118.76 million	$1.31	8.93
Barings Corporate Investors	$37.92 million	11.30	N/A	N/A	N/A

MidCap Financial Investment has higher revenue and earnings than Barings Corporate Investors.

Volatility & Risk

MidCap Financial Investment has a beta of 1.13, indicating that its stock price is 13% more volatile than the S&P 500. Comparatively, Barings Corporate Investors has a beta of 0.42, indicating that its stock price is 58% less volatile than the S&P 500.

Profitability

This table compares MidCap Financial Investment and Barings Corporate Investors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MidCap Financial Investment	37.05%	11.37%	4.70%
Barings Corporate Investors	N/A	N/A	N/A

Summary

MidCap Financial Investment beats Barings Corporate Investors on 11 of the 13 factors compared between the two stocks.

About MidCap Financial Investment

MidCap Financial Investment Corporation (Former name Apollo Investment Corporation) is business development company and a closed-end, externally managed, non-diversified management investment company. It is elected to be treated as a business development company (BDC) under the Investment Company Act of 1940 (the 1940 Act) specializing in private equity investments in leveraged buyouts, acquisitions, recapitalizations, growth capital, refinancing and private middle market companies. It provides direct equity capital, mezzanine, first lien secured loans, stretch senior loans, unitranche loans, second lien secured loans and senior secured loans, unsecured debt, and subordinated debt and loans. It also seeks to invest in PIPES transactions. The fund may also invest in securities of public companies that are thinly traded and may acquire investments in the secondary market and structured products. It prefers to invest in preferred equity, common equity / interests and warrants and makes equity co-investments. It may invest in cash equivalents, U.S. government securities, high-quality debt investments that mature in one year or less, high-yield bonds, distressed debt, non-U.S. investments, or securities of public companies that are not thinly traded. It also focuses on other investments such as collateralized loan obligations (CLOs) and credit-linked notes (CLNs). The fund typically invests in construction and building materials, business services, plastics & rubber, advertising, capital equipment, education, cable television, chemicals, consumer products/goods durable and non-durable and customer services, direct marketing, energy oil & gas, electricity and utilities. The fund also invest in aerospace & defense, wholesale, telecommunications, financial services, hotel, gaming, leisure, restaurants; environmental industries, healthcare and pharmaceuticals, high tech industries, beverages, food and tobacco, manufacturing, media diversified & production, printing and publishing, retail, automation, aviation and consumer transport, transportation, cargo and distribution. It primarily invests in United States. It primarily invests between $20 million and $250 million in its portfolio companies and EBITDA with less than $75 million. The fund seeks to make investments with stated maturities of five to 10 years.

About Barings Corporate Investors

Babson Capital Corporate Investors trust is a closed ended fixed income mutual fund launched and managed by Barings LLC. It invests in fixed income markets of the United States. The fund seeks to invest in securities of companies operating across diversified sectors. It primarily invests in a portfolio of privately placed, below-investment grade, long term corporate debt obligations. The fund also invests in marketable investment grade debt securities, other marketable debt securities, and marketable common stocks. It was formerly known as Babson Capital Corporate Investors. Babson Capital Corporate Investors trust was formed in 1971 and is domiciled in the United States.