Financial Comparison: Main Street Capital (MAIN) and Its Peers

Main Street Capital (NYSE:MAIN) is one of 1,746 public companies in the “Capital Markets” industry, but how does it compare to its competitors? We will compare Main Street Capital to similar companies based on the strength of its risk, dividends, profitability, institutional ownership, valuation, earnings and analyst recommendations.

Dividends

Main Street Capital pays an annual dividend of $3.18 per share and has a dividend yield of 5.9%. Main Street Capital pays out 64.1% of its earnings in the form of a dividend. As a group, “Capital Markets” companies pay a dividend yield of 3.2% and pay out 30.1% of their earnings in the form of a dividend. Main Street Capital has raised its dividend for 4 consecutive years.

Valuation & Earnings

This table compares Main Street Capital and its competitors top-line revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Main Street Capital	$566.39 million	$493.40 million	10.91
Main Street Capital Competitors	$5.15 billion	$396.05 million	15.21

Main Street Capital’s competitors have higher revenue, but lower earnings than Main Street Capital. Main Street Capital is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Profitability

This table compares Main Street Capital and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Main Street Capital	78.49%	11.80%	6.32%
Main Street Capital Competitors	300.87%	79.28%	3.63%

Analyst Recommendations

This is a breakdown of current ratings and price targets for Main Street Capital and its competitors, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Main Street Capital	0	6	5	0	2.45
Main Street Capital Competitors	5521	20040	22360	636	2.37

Main Street Capital presently has a consensus price target of $61.00, suggesting a potential upside of 12.76%. As a group, “Capital Markets” companies have a potential upside of 27.44%. Given Main Street Capital’s competitors higher possible upside, analysts clearly believe Main Street Capital has less favorable growth aspects than its competitors.

Risk & Volatility

Main Street Capital has a beta of 0.74, meaning that its stock price is 26% less volatile than the S&P 500. Comparatively, Main Street Capital’s competitors have a beta of 0.81, meaning that their average stock price is 19% less volatile than the S&P 500.

Insider & Institutional Ownership

20.3% of Main Street Capital shares are owned by institutional investors. Comparatively, 30.6% of shares of all “Capital Markets” companies are owned by institutional investors. 3.8% of Main Street Capital shares are owned by company insiders. Comparatively, 12.9% of shares of all “Capital Markets” companies are owned by company 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

Main Street Capital competitors beat Main Street Capital on 11 of the 15 factors compared.

About Main Street Capital

Main Street Capital Corporation is a business development company specializes in equity capital to lower middle market companies. The firm specializing in recapitalizations, management buyouts, refinancing, family estate planning, management buyouts, refinancing, industry consolidation, mature, later stage emerging growth. The firm also provides debt capital to middle market companies for acquisitions, management buyouts, growth financings, recapitalizations, and refinancing. The firm seeks to partner with entrepreneurs, business owners and management teams and generally provides “one stop” financing alternatives within its lower middle market portfolio. It prefers to invest in air freight and logistics, auto components, building products, chemicals, commercial services, computers, construction and engineering, consumer finance, consumer services, electronic equipment, energy equipment and services, financial services, health care equipment, health care providers, hotels, restaurants, and leisure, internet software and services, IT Services, machinery, oil, gas and consumable fuels, paper and forest products, professional and industrial services, road and rail, software, specialty retail, telecommunication, consumer discretionary, energy, materials, technology, and transportation. The firm typically invests in lower middle market companies generally with annual revenues between $10 million and $150 million. It prefers to invest in ranging between $5 million and $100 million in equity investment and enterprise value in ranging between $3 million and $20 million. The firm typically prefers to invest in the range of $5 million and $150 million per transaction in debt investment value and in the range of $3 million and $75 million in annual EBITDA in between $3 million and $25 million in lower middle market $5 million and $75 million in credit solution. The firm’s middle market debt investments are made in businesses that are generally larger in size than its lower middle market portfolio companies. It takes 5 percent minority and up to 50 percent majority equity investments. Main Street Capital Corporation was founded in 2007 and is based in Houston, Texas with an additional office in Chojnów, Poland.