Critical Analysis: Aura FAT Projects Acquisition (NASDAQ:AFAR) vs. Morgan Stanley Direct Lending (NYSE:MSDL)

Morgan Stanley Direct Lending (NYSE:MSDL) and Aura FAT Projects Acquisition (NASDAQ:AFAR) are both small-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, risk, profitability, institutional ownership, dividends, earnings and analyst recommendations.

Valuation and Earnings

This table compares Morgan Stanley Direct Lending and Aura FAT Projects Acquisition”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Morgan Stanley Direct Lending	$257.79 million	6.92	$231.01 million	$2.55	7.83
Aura FAT Projects Acquisition	N/A	N/A	N/A	N/A	N/A

Morgan Stanley Direct Lending has higher revenue and earnings than Aura FAT Projects Acquisition.

Profitability

This table compares Morgan Stanley Direct Lending and Aura FAT Projects Acquisition’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Morgan Stanley Direct Lending	54.89%	12.77%	6.68%
Aura FAT Projects Acquisition	N/A	N/A	N/A

Insider and Institutional Ownership

53.3% of Aura FAT Projects Acquisition shares are held by institutional investors. 0.2% of Morgan Stanley Direct Lending shares are held by insiders. Comparatively, 49.7% of Aura FAT Projects Acquisition shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings for Morgan Stanley Direct Lending and Aura FAT Projects Acquisition, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Morgan Stanley Direct Lending	0	5	1	0	2.17
Aura FAT Projects Acquisition	0	0	0	0	0.00

Morgan Stanley Direct Lending currently has a consensus target price of $21.42, indicating a potential upside of 7.30%. Given Morgan Stanley Direct Lending’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Morgan Stanley Direct Lending is more favorable than Aura FAT Projects Acquisition.

Summary

Morgan Stanley Direct Lending beats Aura FAT Projects Acquisition on 7 of the 9 factors compared between the two stocks.

About Morgan Stanley Direct Lending

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.

About Aura FAT Projects Acquisition

Aura FAT Projects Acquisition Corp does not have significant operations. The company intends to effect a merger, share exchange, asset acquisition, share purchase, reorganization, or similar business combination with one or more businesses. It focuses on acquiring technology companies with Web 3.0, blockchain, cryptocurrency, digital ledger, e-gaming, and other new financial technology and services applications in Southeast Asia, Australia, and New Zealand. The company was incorporated in 2021 and is based in Singapore.