Critical Analysis: WhiteHorse Finance (NASDAQ:WHF) vs. Nuveen Municipal Income Fund (NYSE:NMI)

WhiteHorse Finance (NASDAQ:WHF) and Nuveen Municipal Income Fund (NYSE:NMI) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, profitability, analyst recommendations, institutional ownership, risk, valuation and dividends.

Earnings & Valuation

This table compares WhiteHorse Finance and Nuveen Municipal Income Fund’s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
WhiteHorse Finance	$24.11 million	11.93	$20.41 million	$0.82	15.09
Nuveen Municipal Income Fund	N/A	N/A	N/A	N/A	N/A

WhiteHorse Finance has higher revenue and earnings than Nuveen Municipal Income Fund.

Risk and Volatility

WhiteHorse Finance has a beta of 1.3, indicating that its stock price is 30% more volatile than the S&P 500. Comparatively, Nuveen Municipal Income Fund has a beta of 0.24, indicating that its stock price is 76% less volatile than the S&P 500.

Insider and Institutional Ownership

13.2% of WhiteHorse Finance shares are held by institutional investors. Comparatively, 16.6% of Nuveen Municipal Income Fund shares are held by institutional investors. 2.3% of WhiteHorse Finance shares are held by insiders. Comparatively, 1.0% of Nuveen Municipal Income Fund shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares WhiteHorse Finance and Nuveen Municipal Income Fund’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
WhiteHorse Finance	18.40%	13.40%	5.74%
Nuveen Municipal Income Fund	N/A	N/A	N/A

Analyst Ratings

This is a summary of current recommendations and price targets for WhiteHorse Finance and Nuveen Municipal Income Fund, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
WhiteHorse Finance	1	2	1	0	2.00
Nuveen Municipal Income Fund	0	0	0	0	N/A

WhiteHorse Finance presently has a consensus price target of $12.81, indicating a potential upside of 3.58%. Given WhiteHorse Finance’s higher possible upside, analysts plainly believe WhiteHorse Finance is more favorable than Nuveen Municipal Income Fund.

Dividends

WhiteHorse Finance pays an annual dividend of $1.54 per share and has a dividend yield of 12.4%. Nuveen Municipal Income Fund pays an annual dividend of $0.40 per share and has a dividend yield of 4.0%. WhiteHorse Finance pays out 187.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

WhiteHorse Finance beats Nuveen Municipal Income Fund on 9 of the 11 factors compared between the two stocks.

About WhiteHorse Finance

WhiteHorse Finance, Inc. is business development company, non-diversified, closed end management company specializing in originating senior secured loans, lower middle market, growth capital industries. It invests in broadline retail, office services and supplies, building products, health care services, health care supplies, research and consulting services, application software, home furnishings, specialized consumer services, data processing and outsourced services, leisure facilities, cable, and satellite. It prefers to invest in United States. It typically invests between $5 million to $25 million in companies having enterprise value of between $50 million and $350 million.

About Nuveen Municipal Income Fund

Nuveen Municipal Income Fund, Inc. is a closed ended fixed income mutual fund launched by Nuveen Investments Inc. The fund is co-managed by Nuveen Fund Advisors LLC and Nuveen Asset Management, LLC. It invests in the fixed income markets of the United States. The fund primarily invests in municipal obligations issued by state and local government authorities. Its investment portfolio comprises investment in companies operating in various industries, including healthcare, materials, education and civic organizations, and consumer staples. Nuveen Municipal Income Fund was formed on April 20, 1988 and is based in the United States.