Critical Contrast: CI Financial (NYSE:CIXXF) versus Monroe Capital (NASDAQ:MRCC)

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

Earnings & Valuation

This table compares Monroe Capital and CI Financial”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Monroe Capital	$64.30 million	N/A	$370,000.00	$0.60	14.07
CI Financial	$2.03 billion	1.21	$3.72 million	($0.33)	-51.76

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

Dividends

Monroe Capital pays an annual dividend of $1.00 per share and has a dividend yield of 11.8%. CI Financial pays an annual dividend of $0.59 per share and has a dividend yield of 3.5%. Monroe Capital pays out 166.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. CI Financial pays out -178.8% of its earnings in the form of a dividend.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Monroe Capital	20.97%	12.14%	4.75%
CI Financial	-2.28%	55.43%	5.23%

Volatility and Risk

Monroe Capital has a beta of 1.03, indicating that its stock price is 3% more volatile than the S&P 500. Comparatively, CI Financial has a beta of 1.31, indicating that its stock price is 31% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations and price targets for Monroe Capital and CI Financial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Monroe Capital	0	0	1	0	3.00
CI Financial	0	1	0	0	2.00

Monroe Capital currently has a consensus target price of $9.00, suggesting a potential upside of 6.64%. Given Monroe Capital’s stronger consensus rating and higher possible upside, research analysts clearly believe Monroe Capital is more favorable than CI Financial.

Summary

Monroe Capital beats CI Financial on 7 of the 13 factors compared between the two stocks.

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.

About CI Financial

CI Financial Corp. is a publicly owned asset management holding company. Through its subsidiaries, the firm manages separate client focused equity, fixed income, and alternative investments portfolios. It also manages mutual funds, hedge funds, and fund of funds for its clients through its subsidiaries. The firm was founded in 1965 and is based in Toronto, Canada with additional offices in Vancouver, Canada; Calgary, Canada; and Montreal, Canada.