Legacy Housing (NASDAQ:LEGH) and Sixth Street Specialty Lending (NYSE:TSLX) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, valuation, institutional ownership, profitability, earnings and dividends.
Insider and Institutional Ownership
18.2% of Legacy Housing shares are owned by institutional investors. Comparatively, 55.7% of Sixth Street Specialty Lending shares are owned by institutional investors. 40.3% of Legacy Housing shares are owned by insiders. Comparatively, 4.4% of Sixth Street Specialty Lending shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Volatility & Risk
Legacy Housing has a beta of 1.09, meaning that its share price is 9% more volatile than the S&P 500. Comparatively, Sixth Street Specialty Lending has a beta of 1.16, meaning that its share price is 16% more volatile than the S&P 500.
Analyst Recommendations
This is a breakdown of current ratings and recommmendations for Legacy Housing and Sixth Street Specialty Lending, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
Legacy Housing | 0 | 1 | 2 | 0 | 2.67 |
Sixth Street Specialty Lending | 0 | 0 | 7 | 0 | 3.00 |
Legacy Housing currently has a consensus target price of $16.6667, indicating a potential upside of 10.60%. Sixth Street Specialty Lending has a consensus target price of $18.1429, indicating a potential downside of 13.97%. Given Legacy Housing's higher probable upside, equities research analysts plainly believe Legacy Housing is more favorable than Sixth Street Specialty Lending.
Valuation & Earnings
This table compares Legacy Housing and Sixth Street Specialty Lending's gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
Legacy Housing | $168.96 million | 2.16 | $28.84 million | $1.18 | 12.77 |
Sixth Street Specialty Lending | $251.49 million | 5.67 | $128.28 million | $1.94 | 10.87 |
Sixth Street Specialty Lending has higher revenue and earnings than Legacy Housing. Sixth Street Specialty Lending is trading at a lower price-to-earnings ratio than Legacy Housing, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Legacy Housing and Sixth Street Specialty Lending's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
Legacy Housing | 19.22% | 13.53% | 10.40% |
Sixth Street Specialty Lending | 59.17% | 13.52% | 6.95% |
Summary
Sixth Street Specialty Lending beats Legacy Housing on 9 of the 14 factors compared between the two stocks.