Head to Head Contrast: Apollo Investment (NASDAQ:AINV) & The Gabelli Convertible and Income Securities Fund (NYSE:GCV)

Apollo Investment (NASDAQ:AINVGet Rating) and The Gabelli Convertible and Income Securities Fund (NYSE:GCVGet Rating) are both small-cap finance companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, risk, valuation, analyst recommendations, earnings, dividends and profitability.

Institutional & Insider Ownership

30.8% of Apollo Investment shares are owned by institutional investors. 0.6% of Apollo Investment shares are owned by insiders. Comparatively, 0.8% of The Gabelli Convertible and Income Securities Fund shares are owned by 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.

Risk & Volatility

Apollo Investment has a beta of 1.72, indicating that its stock price is 72% more volatile than the S&P 500. Comparatively, The Gabelli Convertible and Income Securities Fund has a beta of 1, indicating that its stock price has a similar volatility profile to the S&P 500.

Dividends

Apollo Investment pays an annual dividend of $1.24 per share and has a dividend yield of 9.9%. The Gabelli Convertible and Income Securities Fund pays an annual dividend of $0.53 per share and has a dividend yield of 9.0%. Apollo Investment pays out 97.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Apollo Investment has raised its dividend for 1 consecutive years. Apollo Investment is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares Apollo Investment and The Gabelli Convertible and Income Securities Fund’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Apollo Investment $213.15 million 3.73 $111.86 million $1.27 9.86
The Gabelli Convertible and Income Securities Fund N/A N/A N/A N/A N/A

Apollo Investment has higher revenue and earnings than The Gabelli Convertible and Income Securities Fund.

Profitability

This table compares Apollo Investment and The Gabelli Convertible and Income Securities Fund’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Apollo Investment 38.64% 9.27% 3.62%
The Gabelli Convertible and Income Securities Fund N/A N/A N/A

Analyst Ratings

This is a summary of current recommendations and price targets for Apollo Investment and The Gabelli Convertible and Income Securities Fund, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Apollo Investment 0 2 1 0 2.33
The Gabelli Convertible and Income Securities Fund 0 0 0 0 N/A

Apollo Investment presently has a consensus target price of $13.38, suggesting a potential upside of 6.83%. Given Apollo Investment’s higher probable upside, equities analysts plainly believe Apollo Investment is more favorable than The Gabelli Convertible and Income Securities Fund.

Summary

Apollo Investment beats The Gabelli Convertible and Income Securities Fund on 10 of the 12 factors compared between the two stocks.

Apollo Investment Company Profile (Get Rating)

Apollo Investment Corporation is a closed-end, externally managed, non-diversified management investment company that has 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 and may also 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, 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. The fund seeks to make investments with stated maturities of five to 10 years.

The Gabelli Convertible and Income Securities Fund Company Profile (Get Rating)

The Gabelli Convertible and Income Securities Fund Inc. is a closed-ended balanced mutual fund launched by GAMCO Investors, Inc. The fund is managed by Gabelli Funds, LLC. It invests in public equity and fixed income markets. The fund seeks to invest in stocks of companies operating across diversified sectors. It primarily invests in convertible securities and other debt and equity securities. The fund benchmarks the performance of its portfolio against the Standard & Poor's 500 Index, Barclays Government/Credit Bond Index, and Lipper Convertible Securities Fund Average. It was formerly known as Gabelli Convertible Securities Fund Inc. The Gabelli Convertible and Income Securities Fund Inc. was formed on December 19, 1988 and is domiciled in the United States.

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