Comparing Stifel Financial (NYSE:SF) & Morgan Stanley Direct Lending Fund (NYSE:MSDL)

Stifel Financial (NYSE:SF) and Morgan Stanley Direct Lending Fund (NYSE:MSDL) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, institutional ownership, dividends, risk, earnings, analyst recommendations and profitability.

Analyst Ratings

This is a summary of recent ratings for Stifel Financial and Morgan Stanley Direct Lending Fund, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Stifel Financial	0	4	5	0	2.56
Morgan Stanley Direct Lending Fund	0	6	1	0	2.14

Stifel Financial currently has a consensus target price of $86.08, indicating a potential upside of 26.88%. Morgan Stanley Direct Lending Fund has a consensus target price of $15.50, indicating a potential upside of 19.37%. Given Stifel Financial’s stronger consensus rating and higher probable upside, analysts clearly believe Stifel Financial is more favorable than Morgan Stanley Direct Lending Fund.

Dividends

Stifel Financial pays an annual dividend of $1.36 per share and has a dividend yield of 2.0%. Morgan Stanley Direct Lending Fund pays an annual dividend of $1.80 per share and has a dividend yield of 13.9%. Stifel Financial pays out 24.3% of its earnings in the form of a dividend. Morgan Stanley Direct Lending Fund pays out 260.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Stifel Financial has raised its dividend for 9 consecutive years.

Earnings and Valuation

This table compares Stifel Financial and Morgan Stanley Direct Lending Fund”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Stifel Financial	$5.53 billion	1.85	$683.78 million	$5.59	12.14
Morgan Stanley Direct Lending Fund	$397.29 million	2.75	$122.09 million	$0.69	18.82

Stifel Financial has higher revenue and earnings than Morgan Stanley Direct Lending Fund. Stifel Financial is trading at a lower price-to-earnings ratio than Morgan Stanley Direct Lending Fund, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Stifel Financial has a beta of 1.01, meaning that its stock price is 1% more volatile than the S&P 500. Comparatively, Morgan Stanley Direct Lending Fund has a beta of 0.58, meaning that its stock price is 42% less volatile than the S&P 500.

Profitability

This table compares Stifel Financial and Morgan Stanley Direct Lending Fund’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Stifel Financial	16.11%	19.22%	2.36%
Morgan Stanley Direct Lending Fund	15.97%	9.61%	4.28%

Insider & Institutional Ownership

82.0% of Stifel Financial shares are owned by institutional investors. 3.4% of Stifel Financial shares are owned by insiders. Comparatively, 0.3% of Morgan Stanley Direct Lending Fund shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Stifel Financial beats Morgan Stanley Direct Lending Fund on 14 of the 17 factors compared between the two stocks.

About Stifel Financial

Stifel Financial Corp., a financial services and bank holding company, provides retail and institutional wealth management, and investment banking services to individual investors, corporations, municipalities, and institutions in the United States and internationally. It operates in three segments: Global Wealth Management, Institutional Group, and Other. The company provides private client services, including securities transaction and financial planning services; institutional equity and fixed income sales, trading and research, and municipal finance services; investment banking services, such as mergers and acquisitions, public offerings, and private placements; and retail and commercial banking services comprising personal and commercial lending programs, as well as deposit accounts. It participates in and manages underwritings for corporate and public finance; and offers financial advisory and securities brokerage services. The company was founded in 1890 and is headquartered in Saint Louis, Missouri.

About Morgan Stanley Direct Lending Fund

Morgan Stanley Direct Lending Fund is a business development company. It is a non-diversified, externally managed specialty finance company focused on lending to middle-market companies. Morgan Stanley Direct Lending Fund is based in NEW YORK.