Contrasting SLR Investment (NASDAQ:SLRC) & Flaherty & Crumrine Preferred Income Opportunity Fund (NYSE:PFO)

SLR Investment (NASDAQ:SLRC) and Flaherty & Crumrine Preferred Income Opportunity Fund (NYSE:PFO) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, institutional ownership, earnings, profitability, valuation and risk.

Profitability

This table compares SLR Investment and Flaherty & Crumrine Preferred Income Opportunity Fund’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SLR Investment	41.66%	9.51%	3.72%
Flaherty & Crumrine Preferred Income Opportunity Fund	N/A	N/A	N/A

Dividends

SLR Investment pays an annual dividend of $1.64 per share and has a dividend yield of 10.9%. Flaherty & Crumrine Preferred Income Opportunity Fund pays an annual dividend of $0.55 per share and has a dividend yield of 6.4%. SLR Investment pays out 92.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Ratings

This is a breakdown of current ratings and price targets for SLR Investment and Flaherty & Crumrine Preferred Income Opportunity Fund, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SLR Investment	2	3	0	0	1.60
Flaherty & Crumrine Preferred Income Opportunity Fund	0	0	0	0	N/A

SLR Investment presently has a consensus target price of $15.25, indicating a potential upside of 0.99%. Given SLR Investment’s higher probable upside, equities analysts clearly believe SLR Investment is more favorable than Flaherty & Crumrine Preferred Income Opportunity Fund.

Valuation and Earnings

This table compares SLR Investment and Flaherty & Crumrine Preferred Income Opportunity Fund’s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SLR Investment	$229.31 million	3.59	$76.39 million	$1.78	8.48
Flaherty & Crumrine Preferred Income Opportunity Fund	$20.34 million	5.51	N/A	N/A	N/A

SLR Investment has higher revenue and earnings than Flaherty & Crumrine Preferred Income Opportunity Fund.

Institutional and Insider Ownership

35.3% of SLR Investment shares are owned by institutional investors. Comparatively, 12.9% of Flaherty & Crumrine Preferred Income Opportunity Fund shares are owned by institutional investors. 8.2% of SLR Investment shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Volatility and Risk

SLR Investment has a beta of 1.13, indicating that its stock price is 13% more volatile than the S&P 500. Comparatively, Flaherty & Crumrine Preferred Income Opportunity Fund has a beta of 0.88, indicating that its stock price is 12% less volatile than the S&P 500.

Summary

SLR Investment beats Flaherty & Crumrine Preferred Income Opportunity Fund on 9 of the 11 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 Flaherty & Crumrine Preferred Income Opportunity Fund

Flaherty & Crumrine Preferred Income Opportunity Fund Inc. is a closed ended equity mutual fund launched and managed by Flaherty & Crumrine Incorporated. The fund invests in the public equity markets of the United States. It invests in stocks of companies operating in the financial services sector. The fund primarily invests in preferred securities. It benchmarks the performance of its portfolio against S&P 500 Index and Barclays Capital U.S. Aggregate Index. Flaherty & Crumrine Preferred Income Opportunity Fund Inc. was formed on December 10, 1991 and is domiciled in the United States.