Critical Survey: Morgan Stanley Direct Lending (MSDL) and Its Competitors

Morgan Stanley Direct Lending (NYSE:MSDL) is one of 654 publicly-traded companies in the “Holding & other investment offices” industry, but how does it compare to its rivals? We will compare Morgan Stanley Direct Lending to similar companies based on the strength of its valuation, analyst recommendations, profitability, risk, institutional ownership, dividends and earnings.

Institutional and Insider Ownership

54.0% of shares of all “Holding & other investment offices” companies are owned by institutional investors. 25.5% of shares of all “Holding & other investment offices” companies are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Dividends

Morgan Stanley Direct Lending pays an annual dividend of $2.00 per share and has a dividend yield of 9.4%. 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 6.8% and pay out 63.9% 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.

Valuation and 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	6.78
Morgan Stanley Direct Lending Competitors	$1.27 billion	-$77.20 million	53.76

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 Ratings

This is a breakdown of current ratings and recommmendations 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	121	549	836	14	2.49

Morgan Stanley Direct Lending presently has a consensus target price of $21.58, suggesting a potential upside of 1.76%. As a group, “Holding & other investment offices” companies have a potential upside of 149.39%. Given Morgan Stanley Direct Lending’s rivals higher probable upside, analysts clearly believe Morgan Stanley Direct Lending has less favorable growth aspects than its rivals.

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%	11.51%	5.99%
Morgan Stanley Direct Lending Competitors	5.40%	-54.27%	2.53%

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.