Critical Comparison: BlackRock LT Municipal Advantage Trust (BTA) & FS Investment Corporation (FSIC)

BlackRock LT Municipal Advantage Trust (NYSE: BTA) and FS Investment Corporation (NYSE:FSIC) are both financials companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, earnings, risk, analyst recommendations, profitability, dividends and valuation.

Analyst Recommendations

This is a summary of current recommendations and price targets for BlackRock LT Municipal Advantage Trust and FS Investment Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
BlackRock LT Municipal Advantage Trust 2 6 7 0 2.33
FS Investment Corporation 0 4 0 0 2.00

BlackRock LT Municipal Advantage Trust currently has a consensus price target of $357.00, indicating a potential upside of 2,790.69%. FS Investment Corporation has a consensus price target of $9.67, indicating a potential upside of 14.40%. Given BlackRock LT Municipal Advantage Trust’s stronger consensus rating and higher probable upside, research analysts plainly believe BlackRock LT Municipal Advantage Trust is more favorable than FS Investment Corporation.

Profitability

This table compares BlackRock LT Municipal Advantage Trust and FS Investment Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
BlackRock LT Municipal Advantage Trust -45.66% -3.37% -2.00%
FS Investment Corporation 59.88% 8.92% 4.92%

Dividends

FS Investment Corporation pays an annual dividend of $0.89 per share and has a dividend yield of 10.5%. BlackRock LT Municipal Advantage Trust does not pay a dividend. FS Investment Corporation pays out 87.3% 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 & Valuation

This table compares BlackRock LT Municipal Advantage Trust and FS Investment Corporation’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
BlackRock LT Municipal Advantage Trust N/A N/A N/A N/A N/A
FS Investment Corporation N/A N/A N/A $1.02 8.28

Insider & Institutional Ownership

32.5% of FS Investment Corporation shares are owned by institutional investors. 1.0% of FS Investment Corporation shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

FS Investment Corporation beats BlackRock LT Municipal Advantage Trust on 6 of the 10 factors compared between the two stocks.

About BlackRock LT Municipal Advantage Trust

BlackRock Long-Term Municipal Advantage Trust (the Trust) is a non-diversified, closed-end management investment company. The Trust’s investment objective is to provide current income exempt from regular federal income tax. The Trust seeks to achieve its investment objective by investing, under normal market conditions, at least 80% of its assets in municipal obligations and derivative instruments with exposure to such municipal obligations, in each case that are exempt from federal income tax (except that the interest may be subject to the federal alternative minimum tax). The Trust invests primarily in long-term municipal bonds with a maturity of more than 10 years at the time of investment. The Trust’s municipal bond portfolio will have a dollar-weighted average maturity of more than 10 years. The Trust may invest directly in such securities or synthetically through the use of derivatives. BlackRock Advisors, LLC is the investment manager of the Trust.

About FS Investment Corporation

FS Investment Corporation is an externally managed, non-diversified, closed-end management investment company. The Company’s investment objectives are to generate current income and long-term capital appreciation. Its portfolio consists primarily of investments in senior secured loans and second lien secured loans of the private United States middle market companies and subordinated loans of the private United States companies. It may purchase interests in loans or make other debt investments, including investments in senior secured bonds, through secondary market transactions in the over-the-counter market or directly from target companies as primary market or directly originated investments. It invests in a range of industries, including capital goods; consumer services; consumer durables and apparel; materials; commercial and professional services, and diversified financials. Its investment advisor is FB Income Advisor, LLC.

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