Capitala Finance (NASDAQ: CPTA) and TriplePoint Venture Growth BDC (NYSE:TPVG) are both small-cap financials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, profitability, institutional ownership, valuation, earnings and dividends.
Insider and Institutional Ownership
18.3% of Capitala Finance shares are owned by institutional investors. Comparatively, 33.9% of TriplePoint Venture Growth BDC shares are owned by institutional investors. 8.4% of Capitala Finance shares are owned by insiders. Comparatively, 1.3% of TriplePoint Venture Growth BDC shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Capitala Finance has a beta of 0.97, meaning that its stock price is 3% less volatile than the S&P 500. Comparatively, TriplePoint Venture Growth BDC has a beta of 1.36, meaning that its stock price is 36% more volatile than the S&P 500.
This is a breakdown of recent ratings and price targets for Capitala Finance and TriplePoint Venture Growth BDC, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|TriplePoint Venture Growth BDC||0||1||1||0||2.50|
Capitala Finance presently has a consensus target price of $13.50, indicating a potential upside of 72.63%. TriplePoint Venture Growth BDC has a consensus target price of $14.00, indicating a potential upside of 8.44%. Given Capitala Finance’s higher possible upside, research analysts clearly believe Capitala Finance is more favorable than TriplePoint Venture Growth BDC.
This table compares Capitala Finance and TriplePoint Venture Growth BDC’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|TriplePoint Venture Growth BDC||43.72%||12.05%||5.99%|
Capitala Finance pays an annual dividend of $1.00 per share and has a dividend yield of 12.8%. TriplePoint Venture Growth BDC pays an annual dividend of $1.44 per share and has a dividend yield of 11.2%. Capitala Finance pays out 909.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Valuation & Earnings
This table compares Capitala Finance and TriplePoint Venture Growth BDC’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Capitala Finance||$68.31 million||1.82||$9.15 million||$0.11||71.09|
|TriplePoint Venture Growth BDC||$43.63 million||5.24||$11.12 million||N/A||N/A|
TriplePoint Venture Growth BDC has lower revenue, but higher earnings than Capitala Finance.
TriplePoint Venture Growth BDC beats Capitala Finance on 9 of the 14 factors compared between the two stocks.
About Capitala Finance
Capitala Finance Corp. is an externally managed non-diversified, closed-end management investment company. The Company’s investment objective is to generate both current income and capital appreciation through debt and equity investments. Both directly and through its subsidiaries that are licensed by the United States Small Business Administration (SBA), the Company offers financing to business owners, management teams and financial sponsors for change of ownership transactions, recapitalizations, strategic acquisitions, business expansion and other growth initiatives. The Company provides capital to lower and traditional middle-market companies in the United States, with a non-exclusive emphasis on the Southeast, Southwest and Mid-Atlantic regions. The Company invests in first lien, second lien and subordinated loans. The Company’s investment advisor is Capitala Investment Advisors, LLC.
About TriplePoint Venture Growth BDC
TriplePoint Venture Growth BDC Corp. is a closed-end, non-diversified management investment company. The Company’s investment objective is to maximize its total return to stockholders primarily in the form of current income and, to a lesser extent, capital appreciation by primarily lending with warrants to venture growth stage companies focused in technology, life sciences and other high growth industries, which are backed by TriplePoint Capital LLC’s (TPC) select group of venture capital investors. The Company targets investment opportunities in venture growth stage companies backed by venture capital investors. The Company originates and invests primarily in loans that have a secured collateral position and are used by venture growth stage companies to finance their continued expansion and growth, equipment financings and, on a select basis, revolving loans. The Company is managed by TPVG Advisers LLC.
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