Financial Review: Monroe Capital (NASDAQ:MRCC) vs. BlackRock (NYSE:BLK)

BlackRock (NYSE:BLK) and Monroe Capital (NASDAQ:MRCC) are both finance companies, but which is the superior stock? We will compare the two companies based on the strength of their analyst recommendations, risk, valuation, dividends, profitability, earnings and institutional ownership.

Profitability

This table compares BlackRock and Monroe Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
BlackRock	22.93%	15.14%	5.14%
Monroe Capital	-9.58%	8.49%	3.58%

Risk & Volatility

BlackRock has a beta of 1.47, meaning that its stock price is 47% more volatile than the S&P 500. Comparatively, Monroe Capital has a beta of 0.74, meaning that its stock price is 26% less volatile than the S&P 500.

Insider & Institutional Ownership

80.7% of BlackRock shares are held by institutional investors. 2.0% of BlackRock shares are held by company insiders. Comparatively, 3.8% of Monroe Capital shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Dividends

BlackRock pays an annual dividend of $20.84 per share and has a dividend yield of 1.8%. Monroe Capital pays an annual dividend of $0.72 per share and has a dividend yield of 10.7%. BlackRock pays out 58.8% of its earnings in the form of a dividend. Monroe Capital pays out -378.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. BlackRock has raised its dividend for 16 consecutive years. Monroe Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a breakdown of current recommendations and price targets for BlackRock and Monroe Capital, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BlackRock	0	5	15	0	2.75
Monroe Capital	0	2	0	0	2.00

BlackRock currently has a consensus target price of $1,314.71, indicating a potential upside of 12.88%. Monroe Capital has a consensus target price of $8.00, indicating a potential upside of 19.23%. Given Monroe Capital’s higher possible upside, analysts clearly believe Monroe Capital is more favorable than BlackRock.

Valuation & Earnings

This table compares BlackRock and Monroe Capital”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BlackRock	$24.22 billion	7.46	$6.37 billion	$35.42	32.88
Monroe Capital	$60.53 million	2.40	$9.70 million	($0.19)	-35.32

BlackRock has higher revenue and earnings than Monroe Capital. Monroe Capital is trading at a lower price-to-earnings ratio than BlackRock, indicating that it is currently the more affordable of the two stocks.

Summary

BlackRock beats Monroe Capital on 13 of the 17 factors compared between the two stocks.

About BlackRock

BlackRock, Inc. is a publicly owned investment manager. The firm primarily provides its services to institutional, intermediary, and individual investors including corporate, public, union, and industry pension plans, insurance companies, third-party mutual funds, endowments, public institutions, governments, foundations, charities, sovereign wealth funds, corporations, official institutions, and banks. It also provides global risk management and advisory services. The firm manages separate client-focused equity, fixed income, and balanced portfolios. It also launches and manages open-end and closed-end mutual funds, offshore funds, unit trusts, and alternative investment vehicles including structured funds. The firm launches equity, fixed income, balanced, and real estate mutual funds. It also launches equity, fixed income, balanced, currency, commodity, and multi-asset exchange traded funds. The firm also launches and manages hedge funds. It invests in the public equity, fixed income, real estate, currency, commodity, and alternative markets across the globe. The firm primarily invests in growth and value stocks of small-cap, mid-cap, SMID-cap, large-cap, and multi-cap companies. It also invests in dividend-paying equity securities. The firm invests in investment grade municipal securities, government securities including securities issued or guaranteed by a government or a government agency or instrumentality, corporate bonds, and asset-backed and mortgage-backed securities. It employs fundamental and quantitative analysis with a focus on bottom-up and top-down approach to make its investments. The firm employs liquidity, asset allocation, balanced, real estate, and alternative strategies to make its investments. In real estate sector, it seeks to invest in Poland and Germany. The firm benchmarks the performance of its portfolios against various S&P, Russell, Barclays, MSCI, Citigroup, and Merrill Lynch indices. BlackRock, Inc. was founded in 1988 and is based in New York City with additional offices in Boston, Massachusetts; London, United Kingdom; Gurgaon, India; Hong Kong; Greenwich, Connecticut; Princeton, New Jersey; Edinburgh, United Kingdom; Sydney, Australia; Taipei, Taiwan; Singapore; Sao Paulo, Brazil; Philadelphia, Pennsylvania; Washington, District of Columbia; Toronto, Canada; Wilmington, Delaware; and San Francisco, California.

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.