Head to Head Review: Morgan Stanley Direct Lending (MSDL) versus The Competition

Morgan Stanley Direct Lending (NYSE:MSDL) is one of 670 public companies in the “Holding & other investment offices” industry, but how does it weigh in compared to its rivals? We will compare Morgan Stanley Direct Lending to related companies based on the strength of its earnings, risk, valuation, analyst recommendations, institutional ownership, profitability and dividends.

Insider and Institutional Ownership

53.7% of shares of all “Holding & other investment offices” companies are owned by institutional investors. 25.2% of shares of all “Holding & other investment offices” companies are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Morgan Stanley Direct Lending and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Morgan Stanley Direct Lending	62.81%	13.08%	6.23%
Morgan Stanley Direct Lending Competitors	-38.43%	-49.10%	-0.62%

Valuation & Earnings

This table compares Morgan Stanley Direct Lending and its rivals top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Morgan Stanley Direct Lending	$367.74 million	$231.01 million	6.85
Morgan Stanley Direct Lending Competitors	$1.01 billion	-$39.17 million	59.15

Morgan Stanley Direct Lending’s rivals have higher revenue, but lower earnings than Morgan Stanley Direct Lending. Morgan Stanley Direct Lending is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Morgan Stanley Direct Lending and its rivals, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Morgan Stanley Direct Lending	0	3	3	0	2.50
Morgan Stanley Direct Lending Competitors	120	560	879	14	2.50

Morgan Stanley Direct Lending currently has a consensus target price of $21.58, suggesting a potential upside of 0.72%. As a group, “Holding & other investment offices” companies have a potential upside of 86.96%. Given Morgan Stanley Direct Lending’s rivals stronger consensus rating and higher probable upside, analysts plainly believe Morgan Stanley Direct Lending has less favorable growth aspects than its rivals.

Dividends

Morgan Stanley Direct Lending pays an annual dividend of $2.00 per share and has a dividend yield of 9.3%. Morgan Stanley Direct Lending pays out 63.9% of its earnings in the form of a dividend. As a group, “Holding & other investment offices” companies pay a dividend yield of 7.9% and pay out 71.2% of their earnings in the form of a dividend. Morgan Stanley Direct Lending is clearly a better dividend stock than its rivals, given its higher yield and lower payout ratio.

Summary

Morgan Stanley Direct Lending rivals beat Morgan Stanley Direct Lending on 8 of the 14 factors compared.

About Morgan Stanley Direct Lending

Morgan Stanley Direct Lending Fund is a business development company. It is a non-diversified, externally managed specialty finance company focused on lending to middle-market companies. Morgan Stanley Direct Lending Fund is based in NEW YORK.