Eaton Vance Municipal Income Trust (NYSE:EVN – Get Rating) and MidCap Financial Investment (NASDAQ:MFIC – Get Rating) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, analyst recommendations, dividends, institutional ownership, earnings, valuation and profitability.

Volatility & Risk

Eaton Vance Municipal Income Trust has a beta of 0.31, indicating that its share price is 69% less volatile than the S&P 500. Comparatively, MidCap Financial Investment has a beta of 1.6, indicating that its share price is 60% more volatile than the S&P 500.

Earnings & Valuation

This table compares Eaton Vance Municipal Income Trust and MidCap Financial Investment's revenue, earnings per share and valuation.

Institutional & Insider Ownership

28.6% of MidCap Financial Investment shares are held by institutional investors. 1.0% of Eaton Vance Municipal Income Trust shares are held by company insiders. Comparatively, 0.9% of MidCap Financial Investment shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current recommendations for Eaton Vance Municipal Income Trust and MidCap Financial Investment, as reported by MarketBeat.

MidCap Financial Investment has a consensus price target of $12.17, suggesting a potential upside of 0.14%. Given MidCap Financial Investment's higher probable upside, analysts plainly believe MidCap Financial Investment is more favorable than Eaton Vance Municipal Income Trust.

Dividends

Eaton Vance Municipal Income Trust pays an annual dividend of $0.56 per share and has a dividend yield of 5.6%. MidCap Financial Investment pays an annual dividend of $1.28 per share and has a dividend yield of 10.5%. MidCap Financial Investment pays out 175.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. MidCap Financial Investment has increased its dividend for 1 consecutive years. MidCap Financial Investment is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Eaton Vance Municipal Income Trust and MidCap Financial Investment's net margins, return on equity and return on assets.

Summary

MidCap Financial Investment beats Eaton Vance Municipal Income Trust on 10 of the 12 factors compared between the two stocks.

About Eaton Vance Municipal Income Trust

(Get Rating)

Eaton Vance Municipal Income Trust is a close ended fixed income mutual fund launched and managed by Eaton Vance Management. It invests in the fixed income markets. The fund invests primarily in investment grade municipal obligations of various sectors, such as cogeneration, education, electric utilities, general obligations, healthcare, hospital, housing, transportation, and nursing home. Eaton Vance Municipal Income Trust was formed in 1998 and is domiciled in United States.

About MidCap Financial Investment

(Get Rating)

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. The fund seeks to make investments with stated maturities of five to 10 years.

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