Analyzing Royce Value Trust (NYSE:RVT) & SLR Investment (NASDAQ:SLRC)

SLR Investment (NASDAQ:SLRC) and Royce Value Trust (NYSE:RVT) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, profitability, valuation, risk, institutional ownership, earnings and analyst recommendations.

Profitability

This table compares SLR Investment and Royce Value Trust’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SLR Investment	33.31%	9.36%	3.62%
Royce Value Trust	N/A	N/A	N/A

Analyst Recommendations

This is a breakdown of recent ratings for SLR Investment and Royce Value Trust, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SLR Investment	1	3	0	0	1.75
Royce Value Trust	0	0	0	0	N/A

SLR Investment currently has a consensus target price of $14.25, indicating a potential downside of 7.65%. Given SLR Investment’s higher probable upside, equities analysts plainly believe SLR Investment is more favorable than Royce Value Trust.

Institutional and Insider Ownership

35.3% of SLR Investment shares are held by institutional investors. Comparatively, 25.6% of Royce Value Trust shares are held by institutional investors. 8.2% of SLR Investment shares are held by company insiders. Comparatively, 0.1% of Royce Value Trust shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares SLR Investment and Royce Value Trust’s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SLR Investment	$229.31 million	3.67	$76.39 million	$1.40	11.02
Royce Value Trust	$73.91 million	21.92	N/A	N/A	N/A

SLR Investment has higher revenue and earnings than Royce Value Trust.

Dividends

SLR Investment pays an annual dividend of $1.64 per share and has a dividend yield of 10.6%. Royce Value Trust pays an annual dividend of $1.07 per share and has a dividend yield of 7.4%. SLR Investment pays out 117.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. SLR Investment has raised its dividend for 1 consecutive years. SLR Investment is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

SLR Investment has a beta of 1.1, indicating that its stock price is 10% more volatile than the S&P 500. Comparatively, Royce Value Trust has a beta of 1.34, indicating that its stock price is 34% more volatile than the S&P 500.

Summary

SLR Investment beats Royce Value Trust on 9 of the 12 factors compared between the two stocks.

About SLR Investment

SLR Investment Corp. is a business development company specializing in secured debt (first lien unitranche and second lien), subordinated (unsecured) debt, minority equity, leveraged buyouts, acquisitions, recapitalizations, general refinancing, growth capital and strategic income-oriented control equity investments in leveraged middle market companies. The fund invests in aerospace and defense; air freight & logistics; asset management; automotive; banking; beverage, food and tobacco; building products; buildings and real estate; broadcasting and entertainment; cargo transport; commercial services and supplies; communications equipment; chemicals, plastics and rubber; containers, packaging and glass; construction & engineering; diversified/conglomerate manufacturing; consumer Finance; distributors; diversified/conglomerate services; diversified financial services; diversified real estate activities; food products; Footwear; Education Services; diversified telecommunications services; electronics; farming and agriculture; finance; grocery; health care equipment and supplies; health care facilities; education and childcare; home and office furnishing, durable consumer products; hotels, motels, inns and gaming; insurance; restaurants, leisure, amusement, and entertainment; leisure equipment tolls and services, media, multiline retail, multi sector holdings; paper and forest products; personal products; professional services, research and consulting services, software; specialty retail; textiles apparel and luxury goods, thrifts and mortgage finance, trading companies and distributors, utilities, and wireless telecommunication services; industrial conglomerates; internet software and services, IT services, machinery; mining, steel, iron, and non-precious metals; oil and gas; personal, food and miscellaneous services; printing and publishing; retail stores; telecommunications; textiles and leather; and utilities. It also invests in life sciences with focus on specialty pharmaceuticals, medical devices, biotech, health Care Providers and services; health Care technology, enabling technologies and tools. The fund primarily invests in United States. The fund's investments generally range between $5 million and $100 million. The fund invests in companies with revenues between $50 million and $1 billion and EBITDA between $15 million and $100 million. It invests in the form of senior secured loans, mezzanine loans, and equity securities. It may also seek investments in thinly traded public companies and also make secondary investments. The fund makes non-control equity investments. It primarily exits within three years of the initial capital commitment.

About Royce Value Trust

Royce Value Trust Inc. is a close ended equity mutual fund launched and managed by Royce & Associates, LLC. It invests in the public equity markets of the United States. The fund spreads its investments across diversified sectors. It invests in value oriented stocks of small cap and micro cap companies. The fund benchmarks the performance of its portfolio against the Russell 2000 Index. Royce Value Trust Inc. was formed on July 1, 1986 and is domiciled in the United States.