MidCap Financial Investment (NASDAQ:MFIC) & Invesco California Value Municipal Income Trust (NYSE:VCV) Critical Analysis

MidCap Financial Investment (NASDAQ:MFIC) and Invesco California Value Municipal Income Trust (NYSE:VCV) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their earnings, valuation, risk, institutional ownership, dividends, profitability and analyst recommendations.

Valuation and Earnings

This table compares MidCap Financial Investment and Invesco California Value Municipal Income Trust”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MidCap Financial Investment	$121.29 million	10.38	$118.76 million	$1.56	8.60
Invesco California Value Municipal Income Trust	$51.29 million	N/A	N/A	N/A	N/A

MidCap Financial Investment has higher revenue and earnings than Invesco California Value Municipal Income Trust.

Risk and Volatility

MidCap Financial Investment has a beta of 1.49, meaning that its share price is 49% more volatile than the S&P 500. Comparatively, Invesco California Value Municipal Income Trust has a beta of 0.68, meaning that its share price is 32% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and recommmendations for MidCap Financial Investment and Invesco California Value Municipal Income Trust, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MidCap Financial Investment	0	3	4	0	2.57
Invesco California Value Municipal Income Trust	0	0	0	0	0.00

MidCap Financial Investment currently has a consensus target price of $14.71, indicating a potential upside of 9.64%. Given MidCap Financial Investment’s stronger consensus rating and higher probable upside, equities research analysts clearly believe MidCap Financial Investment is more favorable than Invesco California Value Municipal Income Trust.

Dividends

MidCap Financial Investment pays an annual dividend of $1.52 per share and has a dividend yield of 11.3%. Invesco California Value Municipal Income Trust pays an annual dividend of $0.60 per share and has a dividend yield of 5.7%. MidCap Financial Investment pays out 97.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Institutional & Insider Ownership

28.5% of MidCap Financial Investment shares are owned by institutional investors. Comparatively, 18.8% of Invesco California Value Municipal Income Trust shares are owned by institutional investors. 1.1% of MidCap Financial Investment shares are owned by insiders. Comparatively, 6.1% of Invesco California Value Municipal Income Trust shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares MidCap Financial Investment and Invesco California Value Municipal Income Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MidCap Financial Investment	37.05%	11.37%	4.70%
Invesco California Value Municipal Income Trust	N/A	N/A	N/A

Summary

MidCap Financial Investment beats Invesco California Value Municipal Income Trust on 10 of the 12 factors compared between the two stocks.

About MidCap Financial Investment

MidCap Financial Investment Corporation (Former name Apollo Investment Corporation) is business development company and a closed-end, externally managed, non-diversified management investment company. It is elected to be treated as a business development company (BDC) under the Investment Company Act of 1940 (the 1940 Act) specializing in private equity investments in leveraged buyouts, acquisitions, recapitalizations, growth capital, refinancing and private middle market companies. It provides direct equity capital, mezzanine, first lien secured loans, stretch senior loans, unitranche loans, second lien secured loans and senior secured loans, unsecured debt, and subordinated debt and loans. It also seeks to invest in PIPES transactions. The fund may also invest in securities of public companies that are thinly traded and may acquire investments in the secondary market and structured products. It prefers to invest in preferred equity, common equity / interests and warrants and makes equity co-investments. It may invest in cash equivalents, U.S. government securities, high-quality debt investments that mature in one year or less, high-yield bonds, distressed debt, non-U.S. investments, or securities of public companies that are not thinly traded. It also focuses on other investments such as collateralized loan obligations (CLOs) and credit-linked notes (CLNs). The fund typically invests in construction and building materials, business services, plastics & rubber, advertising, capital equipment, education, cable television, chemicals, consumer products/goods durable and non-durable and customer services, direct marketing, energy oil & gas, electricity and utilities. The fund also invest in aerospace & defense, wholesale, telecommunications, financial services, hotel, gaming, leisure, restaurants; environmental industries, healthcare and pharmaceuticals, high tech industries, beverages, food and tobacco, manufacturing, media diversified & production, printing and publishing, retail, automation, aviation and consumer transport, transportation, cargo and distribution. It primarily invests in United States. It primarily invests between $20 million and $250 million in its portfolio companies and EBITDA with less than $75 million. The fund seeks to make investments with stated maturities of five to 10 years.

About Invesco California Value Municipal Income Trust

Invesco California Value Municipal Income Trust is a closed-ended fixed income mutual fund launched by Invesco Ltd. The fund is co-managed by Invesco Advisers, Inc., Invesco Asset Management (Japan) Limited, Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Canada Ltd., Invesco Hong Kong Limited, and Invesco Senior Secured Management, Inc. It invests in the fixed income markets of the United States. The fund primarily invests in investment grade California municipal securities which include municipal bonds, municipal notes, municipal commercial paper, and lease obligations. It employs fundamental analysis with bottom-up security selection approach to create its portfolio. The fund was formerly known as Invesco Van Kampen California Value Municipal Income Trust. Invesco California Value Municipal Income Trust was formed on April 30, 1993 and is domiciled in the United States.