Analyzing WhiteHorse Finance (NASDAQ:WHF) and BNY Mellon Strategic Municipals (NYSE:LEO)

WhiteHorse Finance (NASDAQ:WHF) and BNY Mellon Strategic Municipals (NYSE:LEO) are both small-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, institutional ownership, risk, valuation, dividends, profitability and analyst recommendations.

Risk and Volatility

WhiteHorse Finance has a beta of 1.41, indicating that its stock price is 41% more volatile than the S&P 500. Comparatively, BNY Mellon Strategic Municipals has a beta of 0.36, indicating that its stock price is 64% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for WhiteHorse Finance and BNY Mellon Strategic Municipals, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
WhiteHorse Finance 0 2 1 0 2.33
BNY Mellon Strategic Municipals 0 0 0 0 N/A

WhiteHorse Finance presently has a consensus target price of $16.00, indicating a potential upside of 3.90%. Given WhiteHorse Finance’s higher possible upside, analysts plainly believe WhiteHorse Finance is more favorable than BNY Mellon Strategic Municipals.

Profitability

This table compares WhiteHorse Finance and BNY Mellon Strategic Municipals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
WhiteHorse Finance 49.83% 9.24% 4.16%
BNY Mellon Strategic Municipals N/A N/A N/A

Dividends

WhiteHorse Finance pays an annual dividend of $1.42 per share and has a dividend yield of 9.2%. BNY Mellon Strategic Municipals pays an annual dividend of $0.41 per share and has a dividend yield of 5.0%. WhiteHorse Finance pays out 83.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. WhiteHorse Finance has raised its dividend for 1 consecutive years. WhiteHorse Finance is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

10.2% of WhiteHorse Finance shares are owned by institutional investors. Comparatively, 11.6% of BNY Mellon Strategic Municipals shares are owned by institutional investors. 2.0% of WhiteHorse Finance shares are owned by company insiders. Comparatively, 1.0% of BNY Mellon Strategic Municipals shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares WhiteHorse Finance and BNY Mellon Strategic Municipals’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
WhiteHorse Finance $61.70 million 5.78 $31.68 million $1.71 9.01
BNY Mellon Strategic Municipals N/A N/A N/A N/A N/A

WhiteHorse Finance has higher revenue and earnings than BNY Mellon Strategic Municipals.

Summary

WhiteHorse Finance beats BNY Mellon Strategic Municipals on 10 of the 12 factors compared between the two stocks.

WhiteHorse Finance Company Profile

WhiteHorse Finance, Inc. is an externally managed, non-diversified, closed-end management investment company that has elected to be treated as a business development company under the Investment Company Act of 1940. Our stock is publicly traded on the NASDAQ exchange under the ticker symbol ”WHF”. We have senior notes listed on the NASDAQ exchange under the ticker symbol “WHFBL“.

BNY Mellon Strategic Municipals Company Profile

BNY Mellon Strategic Municipals, Inc. is a closed ended fixed income mutual fund launched and managed by BNY Mellon Investment Adviser, Inc. It invests in the fixed income markets of the United States. The fund primarily invests in investment grade municipal bonds, the income from which is exempt from federal income tax. It employs fundamental analysis to create its portfolio. The fund was formerly known as Dreyfus Strategic Municipals, Inc. BNY Mellon Strategic Municipals, Inc. was formed on September 23, 1987 and is domiciled in the United States.

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