Fidus Investment (NASDAQ: FDUS) and Special Opportunities Fund (NYSE:SPE) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, dividends, profitability, valuation and risk.
Valuation and Earnings
This table compares Fidus Investment and Special Opportunities Fund’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Fidus Investment||$60.23 million||6.56||$41.57 million||$1.97||8.19|
|Special Opportunities Fund||N/A||N/A||N/A||N/A||N/A|
Volatility and Risk
Fidus Investment has a beta of 1.11, indicating that its stock price is 11% more volatile than the S&P 500. Comparatively, Special Opportunities Fund has a beta of 0.78, indicating that its stock price is 22% less volatile than the S&P 500.
This is a breakdown of recent recommendations and price targets for Fidus Investment and Special Opportunities Fund, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Special Opportunities Fund||0||0||2||0||3.00|
Fidus Investment currently has a consensus price target of $17.50, suggesting a potential upside of 8.43%. Special Opportunities Fund has a consensus price target of $9.63, suggesting a potential downside of 40.25%. Given Fidus Investment’s higher possible upside, equities research analysts clearly believe Fidus Investment is more favorable than Special Opportunities Fund.
This table compares Fidus Investment and Special Opportunities Fund’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Special Opportunities Fund||N/A||N/A||N/A|
Insider & Institutional Ownership
32.1% of Fidus Investment shares are held by institutional investors. Comparatively, 45.2% of Special Opportunities Fund shares are held by institutional investors. 1.3% of Fidus Investment shares are held by insiders. Comparatively, 22.4% of Special Opportunities Fund shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Fidus Investment pays an annual dividend of $1.56 per share and has a dividend yield of 9.7%. Special Opportunities Fund pays an annual dividend of $0.56 per share and has a dividend yield of 3.5%. Fidus Investment pays out 79.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Fidus Investment beats Special Opportunities Fund on 7 of the 12 factors compared between the two stocks.
Fidus Investment Company Profile
Fidus Investment Corporation is a closed-end, non-diversified investment company. The Company provides customized debt and equity financing solutions to lower middle-market companies. The Company’s investment objective is to provide attractive risk-adjusted returns by generating both current income from its debt investments and capital appreciation from its equity-related investments. The Company typically invests in mezzanine debt, which includes senior subordinated notes and junior secured loans. The Company structures some of its debt investments as senior secured or unitranche loans. The Company’s equity securities typically consist of either a direct minority equity investment in common or preferred stock or membership/partnership interests of a portfolio company, or it may receive warrants to buy a minority equity interest in a portfolio company in connection with a debt investment. Its investment activities are managed by Fidus Investment Advisors, LLC, its investment advisor.
Special Opportunities Fund Company Profile
Special Opportunities Fund, Inc. (the Fund) is a diversified closed-end management investment company. The Fund’s investment objective is to achieve total return. The Fund’s investment portfolio consists of investment companies, common stocks, commodity partnerships, preferred stocks, money market funds, corporate notes, liquidating trusts, corporate bonds, promissory notes, senior unsecured notes, warrants and rights. The Company also invests in various sectors, such as construction materials; consumer finance; healthcare equipment and supplies; independent power and renewable electricity producers; insurance; personal products; professional services; real estate investment trusts, and special purpose acquisition vehicles. The Fund also invests in closed-end funds, auction rate preferred securities and business development companies, among others. Bulldog Investors, LLC acts as an investment advisor for the Fund.
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