Hercules Capital (NYSE:HTGC) and BNY Mellon Strategic Municipal Bond Fund (NYSE:DSM) are both small-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, institutional ownership, risk, dividends, analyst recommendations, profitability and earnings.
Dividends
Hercules Capital pays an annual dividend of $1.28 per share and has a dividend yield of 7.6%. BNY Mellon Strategic Municipal Bond Fund pays an annual dividend of $0.36 per share and has a dividend yield of 4.5%. Hercules Capital pays out 90.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Hercules Capital has raised its dividend for 1 consecutive years and BNY Mellon Strategic Municipal Bond Fund has raised its dividend for 1 consecutive years.
Institutional & Insider Ownership
28.9% of Hercules Capital shares are owned by institutional investors. Comparatively, 9.0% of BNY Mellon Strategic Municipal Bond Fund shares are owned by institutional investors. 3.3% of Hercules Capital shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Earnings & Valuation
This table compares Hercules Capital and BNY Mellon Strategic Municipal Bond Fund's gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
Hercules Capital | $267.87 million | 7.29 | $173.60 million | $1.41 | 11.99 |
BNY Mellon Strategic Municipal Bond Fund | N/A | N/A | N/A | N/A | N/A |
Hercules Capital has higher revenue and earnings than BNY Mellon Strategic Municipal Bond Fund.
Analyst Ratings
This is a summary of current recommendations for Hercules Capital and BNY Mellon Strategic Municipal Bond Fund, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
Hercules Capital | 0 | 0 | 8 | 0 | 3.00 |
BNY Mellon Strategic Municipal Bond Fund | 0 | 0 | 0 | 0 | N/A |
Hercules Capital presently has a consensus target price of $13.8438, suggesting a potential downside of 18.13%. Given Hercules Capital's higher probable upside, equities research analysts clearly believe Hercules Capital is more favorable than BNY Mellon Strategic Municipal Bond Fund.
Profitability
This table compares Hercules Capital and BNY Mellon Strategic Municipal Bond Fund's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
Hercules Capital | 42.72% | 13.58% | 6.31% |
BNY Mellon Strategic Municipal Bond Fund | N/A | N/A | N/A |
Risk and Volatility
Hercules Capital has a beta of 1.57, indicating that its share price is 57% more volatile than the S&P 500. Comparatively, BNY Mellon Strategic Municipal Bond Fund has a beta of 0.25, indicating that its share price is 75% less volatile than the S&P 500.
Summary
Hercules Capital beats BNY Mellon Strategic Municipal Bond Fund on 10 of the 11 factors compared between the two stocks.