Head-To-Head Comparison: Western Asset Municipal High Income Fund (NYSE:MHF) versus SuRo Capital (NASDAQ:SSSS)

Western Asset Municipal High Income Fund (NYSE:MHF) and SuRo Capital (NASDAQ:SSSS) are both small-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, profitability, analyst recommendations, institutional ownership, dividends, valuation and risk.

Profitability

This table compares Western Asset Municipal High Income Fund and SuRo Capital’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Western Asset Municipal High Income Fund N/A N/A N/A
SuRo Capital 1,249.39% -6.27% -3.94%

Volatility & Risk

Western Asset Municipal High Income Fund has a beta of 0.21, meaning that its stock price is 79% less volatile than the S&P 500. Comparatively, SuRo Capital has a beta of 2.23, meaning that its stock price is 123% more volatile than the S&P 500.

Insider and Institutional Ownership

16.3% of SuRo Capital shares are held by institutional investors. 1.2% of SuRo Capital shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Western Asset Municipal High Income Fund and SuRo Capital’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Western Asset Municipal High Income Fund N/A N/A N/A N/A N/A
SuRo Capital $1.50 million 201.07 $23.95 million N/A N/A

SuRo Capital has higher revenue and earnings than Western Asset Municipal High Income Fund.

Analyst Ratings

This is a summary of current ratings and recommmendations for Western Asset Municipal High Income Fund and SuRo Capital, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Western Asset Municipal High Income Fund 0 0 0 0 N/A
SuRo Capital 0 0 2 0 3.00

SuRo Capital has a consensus price target of $16.75, indicating a potential upside of 12.27%. Given SuRo Capital’s higher possible upside, analysts clearly believe SuRo Capital is more favorable than Western Asset Municipal High Income Fund.

Dividends

Western Asset Municipal High Income Fund pays an annual dividend of $0.27 per share and has a dividend yield of 3.5%. SuRo Capital pays an annual dividend of $3.00 per share and has a dividend yield of 20.1%. Western Asset Municipal High Income Fund has increased its dividend for 1 consecutive years.

Summary

SuRo Capital beats Western Asset Municipal High Income Fund on 8 of the 11 factors compared between the two stocks.

About Western Asset Municipal High Income Fund

Western Asset Municipal High Income Fund Inc. is a closed ended fixed income mutual fund launched and managed by Legg Mason Partners Fund Advisor, LLC. It is co-managed by Western Asset Management Company. The fund invests in the fixed income markets of the United States. It invests primarily in intermediate and long-term municipal debt securities issued by state and local governments including U.S. territories and possessions, political subdivisions, agencies and public authorities. The fund seeks to invest in investment grade debt securities rated in one of the four highest rating categories by a nationally recognized statistical rating organization to create its portfolio. It benchmarks the performance of its portfolio against the Lehman Brothers Municipal Bond Index. The fund was formerly known as Municipal High Income Fund Inc. Western Asset Municipal High Income Fund Inc. was formed on November 28, 1988 and is domiciled in the United States.

About SuRo Capital

Sutter Rock Capital Corp. is specializing in growth capital, B round and beyond, emerging growth, and pre-IPO investments in late stage venture-backed private companies. It makes direct (primary rounds) investments in companies and also makes secondary direct investments. The fund operates as a Business development Company. The fund may also invest in select publicly-traded equity securities of companies that otherwise meet its investment criteria. It seeks to invest in the technology subsectors of social/mobile marketplaces, sustainability, cloud computing and big data, social media, mobile computing and applications, software as a service, Internet commerce, green technology and education technology. The fund invests in the form of non-controlling equity and equity-related investments, including common stock, warrants, preferred stock and similar forms of senior equity, which may or may not be convertible into a portfolio company's common equity, and convertible debt securities with a significant equity component. It will invest in companies based in United States. It generally invests in companies with a market value of over $100 million. Typically, the firm exits its position within 18 months of going public, or 12 months after any relevant lock-up has expired.

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