TSLX vs. PSEC, NMFC, CSWC, GBDC, PFLT, GAIN, MSDL, DRH, HTH, and EQC
Should you be buying Sixth Street Specialty Lending stock or one of its competitors? The main competitors of Sixth Street Specialty Lending include Prospect Capital (PSEC), New Mountain Finance (NMFC), Capital Southwest (CSWC), Golub Capital BDC (GBDC), PennantPark Floating Rate Capital (PFLT), Gladstone Investment (GAIN), Morgan Stanley Direct Lending (MSDL), DiamondRock Hospitality (DRH), Hilltop (HTH), and Equity Commonwealth (EQC). These companies are all part of the "finance" sector.
Prospect Capital (NASDAQ:PSEC) and Sixth Street Specialty Lending (NYSE:TSLX) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, dividends, profitability, media sentiment, valuation, community ranking, risk and earnings.
Prospect Capital has a beta of 1, indicating that its stock price has a similar volatility profile to the S&P 500.Comparatively, Sixth Street Specialty Lending has a beta of 1.04, indicating that its stock price is 4% more volatile than the S&P 500.
In the previous week, Sixth Street Specialty Lending had 1 more articles in the media than Prospect Capital. MarketBeat recorded 2 mentions for Sixth Street Specialty Lending and 1 mentions for Prospect Capital. Prospect Capital's average media sentiment score of 0.43 beat Sixth Street Specialty Lending's score of 0.00 indicating that Sixth Street Specialty Lending is being referred to more favorably in the news media.
Sixth Street Specialty Lending has lower revenue, but higher earnings than Prospect Capital. Prospect Capital is trading at a lower price-to-earnings ratio than Sixth Street Specialty Lending, indicating that it is currently the more affordable of the two stocks.
Prospect Capital presently has a consensus target price of $5.75, indicating a potential upside of 4.55%. Sixth Street Specialty Lending has a consensus target price of $22.60, indicating a potential upside of 6.91%. Given Prospect Capital's stronger consensus rating and higher possible upside, analysts clearly believe Sixth Street Specialty Lending is more favorable than Prospect Capital.
Sixth Street Specialty Lending has a net margin of 50.69% compared to Sixth Street Specialty Lending's net margin of -1.47%. Prospect Capital's return on equity of 13.67% beat Sixth Street Specialty Lending's return on equity.
Prospect Capital pays an annual dividend of $0.72 per share and has a dividend yield of 13.1%. Sixth Street Specialty Lending pays an annual dividend of $1.84 per share and has a dividend yield of 8.7%. Prospect Capital pays out -360.0% of its earnings in the form of a dividend. Sixth Street Specialty Lending pays out 70.8% 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. Sixth Street Specialty Lending has raised its dividend for 2 consecutive years. Prospect Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.
Sixth Street Specialty Lending received 60 more outperform votes than Prospect Capital when rated by MarketBeat users. Likewise, 66.26% of users gave Sixth Street Specialty Lending an outperform vote while only 52.38% of users gave Prospect Capital an outperform vote.
9.1% of Prospect Capital shares are owned by institutional investors. Comparatively, 70.3% of Sixth Street Specialty Lending shares are owned by institutional investors. 26.7% of Prospect Capital shares are owned by insiders. Comparatively, 3.3% of Sixth Street Specialty Lending shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Summary
Sixth Street Specialty Lending beats Prospect Capital on 16 of the 21 factors compared between the two stocks.
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This chart shows the number of new MarketBeat users adding TSLX and its top 5 competitors to their watchlist. Each company is represented with a line over a 90 day period.
This chart shows the average media sentiment of NYSE and its competitors over the past 90 days as caculated by MarketBeat. The averaged score is equivalent to the following: Very Negative Sentiment <= -1.5, Negative Sentiment > -1.5 and <= -0.5, Neutral Sentiment > -0.5 and < 0.5, Positive Sentiment >= 0.5 and < 1.5, and Very Positive Sentiment >= 1.5.
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