Financial Contrast: Perception Capital Corp. III (NASDAQ:PFTA) and Morgan Stanley Direct Lending (NYSE:MSDL)

Perception Capital Corp. III (NASDAQ:PFTA) and Morgan Stanley Direct Lending (NYSE:MSDL) are both small-cap unclassified companies, but which is the better business? We will contrast the two companies based on the strength of their dividends, valuation, institutional ownership, earnings, profitability, risk and analyst recommendations.

Analyst Ratings

This is a breakdown of current ratings for Perception Capital Corp. III and Morgan Stanley Direct Lending, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Perception Capital Corp. III	0	0	0	0	N/A
Morgan Stanley Direct Lending	0	5	1	0	2.17

Morgan Stanley Direct Lending has a consensus price target of $21.42, suggesting a potential upside of 8.11%. Given Morgan Stanley Direct Lending’s higher possible upside, analysts clearly believe Morgan Stanley Direct Lending is more favorable than Perception Capital Corp. III.

Valuation & Earnings

This table compares Perception Capital Corp. III and Morgan Stanley Direct Lending”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Perception Capital Corp. III	N/A	N/A	$7.15 million	N/A	N/A
Morgan Stanley Direct Lending	$367.74 million	4.81	$231.01 million	$2.97	6.67

Morgan Stanley Direct Lending has higher revenue and earnings than Perception Capital Corp. III.

Profitability

This table compares Perception Capital Corp. III and Morgan Stanley Direct Lending’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Perception Capital Corp. III	N/A	-28.86%	1.93%
Morgan Stanley Direct Lending	60.60%	12.57%	6.36%

Institutional and Insider Ownership

26.9% of Perception Capital Corp. III shares are held by institutional investors. 0.4% of Perception Capital Corp. III shares are held by company insiders. Comparatively, 0.2% of Morgan Stanley Direct Lending shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

Morgan Stanley Direct Lending beats Perception Capital Corp. III on 7 of the 9 factors compared between the two stocks.

About Perception Capital Corp. III

Perception Capital Corp. III does not have significant operations. It intends to effect a merger, share exchange, asset acquisition, share purchase, reorganization, or similar business combination with one or more businesses or entities in the financial technology or financial services ecosystem. The company was formerly known as Portage Fintech Acquisition Corporation and changed its name to Perception Capital Corp. III in October 2023. The company was incorporated in 2021 and is based in Minneapolis, Minnesota.

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.