Monroe Capital (NASDAQ:MRCC – Get Free Report) and TPG (NASDAQ:TPG – Get Free Report) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their dividends, risk, valuation, earnings, analyst recommendations, institutional ownership and profitability.
Profitability
This table compares Monroe Capital and TPG’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Monroe Capital | 20.97% | 12.14% | 4.75% |
| TPG | 0.69% | 23.45% | 7.85% |
Analyst Recommendations
This is a breakdown of current ratings and recommmendations for Monroe Capital and TPG, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Monroe Capital | 1 | 0 | 1 | 0 | 2.00 |
| TPG | 0 | 7 | 6 | 0 | 2.46 |
Valuation & Earnings
This table compares Monroe Capital and TPG”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Monroe Capital | $18.11 million | 9.73 | $370,000.00 | $0.60 | 13.55 |
| TPG | $2.47 billion | 9.43 | $80.09 million | ($0.34) | -187.91 |
TPG has higher revenue and earnings than Monroe Capital. TPG is trading at a lower price-to-earnings ratio than Monroe Capital, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Monroe Capital has a beta of 1.04, suggesting that its share price is 4% more volatile than the S&P 500. Comparatively, TPG has a beta of 1.46, suggesting that its share price is 46% more volatile than the S&P 500.
Institutional and Insider Ownership
94.0% of TPG shares are held by institutional investors. 3.6% of Monroe Capital shares are held by company insiders. Comparatively, 76.5% of TPG shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Dividends
Monroe Capital pays an annual dividend of $1.00 per share and has a dividend yield of 12.3%. TPG pays an annual dividend of $1.52 per share and has a dividend yield of 2.4%. 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. TPG pays out -447.1% of its earnings in the form of a dividend.
Summary
TPG beats Monroe Capital on 10 of the 16 factors compared between the two stocks.
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.
About TPG
TPG Inc. operates as an alternative asset manager in the United States and internationally. The company offers investment management services to TPG Funds, limited partners, and other vehicles. It also offers monitoring services to portfolio companies; advisory, debt and equity arrangement, and underwriting and placement services; and capital structuring and other advisory services to portfolio companies. In addition, the company invests in private equity funds, real estate funds, hedge funds, and credit funds. TPG Inc. was founded in 1992 and is based in Fort Worth, Texas. The company operates as a subsidiary of TPG GP A, LLC.
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