Contrasting BNY Mellon Strategic Municipals (NYSE:LEO) & MidCap Financial Investment (NASDAQ:MFIC)

MidCap Financial Investment (NASDAQ:MFIC) and BNY Mellon Strategic Municipals (NYSE:LEO) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their valuation, analyst recommendations, risk, dividends, earnings, institutional ownership and profitability.

Earnings & Valuation

This table compares MidCap Financial Investment and BNY Mellon Strategic Municipals”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MidCap Financial Investment	$110.35 million	9.99	$118.76 million	$1.31	8.98
BNY Mellon Strategic Municipals	$73.46 million	N/A	N/A	N/A	N/A

MidCap Financial Investment has higher revenue and earnings than BNY Mellon Strategic Municipals.

Institutional and Insider Ownership

28.5% of MidCap Financial Investment shares are owned by institutional investors. 1.1% of MidCap Financial Investment shares are owned by insiders. Comparatively, 1.0% of BNY Mellon Strategic Municipals 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.

Dividends

MidCap Financial Investment pays an annual dividend of $1.52 per share and has a dividend yield of 12.9%. BNY Mellon Strategic Municipals pays an annual dividend of $0.19 per share and has a dividend yield of 3.3%. MidCap Financial Investment pays out 116.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Recommendations

This is a breakdown of current recommendations for MidCap Financial Investment and BNY Mellon Strategic Municipals, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MidCap Financial Investment	0	2	3	0	2.60
BNY Mellon Strategic Municipals	0	0	0	0	0.00

MidCap Financial Investment currently has a consensus price target of $14.50, indicating a potential upside of 23.30%. Given MidCap Financial Investment’s stronger consensus rating and higher probable upside, analysts clearly believe MidCap Financial Investment is more favorable than BNY Mellon Strategic Municipals.

Profitability

This table compares MidCap Financial Investment and BNY Mellon Strategic Municipals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MidCap Financial Investment	37.05%	11.37%	4.70%
BNY Mellon Strategic Municipals	N/A	N/A	N/A

Risk & Volatility

MidCap Financial Investment has a beta of 1.13, indicating that its stock price is 13% more volatile than the S&P 500. Comparatively, BNY Mellon Strategic Municipals has a beta of 0.56, indicating that its stock price is 44% less volatile than the S&P 500.

Summary

MidCap Financial Investment beats BNY Mellon Strategic Municipals on 11 of the 12 factors compared between the two stocks.

About MidCap Financial Investment

MidCap Financial Investment Corporation (Former name Apollo Investment Corporation) is business development company and a closed-end, externally managed, non-diversified management investment company. It is 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. It may 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. The fund also invest in 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 and EBITDA with less than $75 million. The fund seeks to make investments with stated maturities of five to 10 years.

About BNY Mellon Strategic Municipals

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.