Fidus Investment (FDUS) vs. Hamilton Lane (HLNE) Head-To-Head Comparison

Fidus Investment (NASDAQ:FDUS) and Hamilton Lane (NASDAQ:HLNE) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, institutional ownership, earnings, analyst recommendations, risk, dividends and valuation.

Profitability

This table compares Fidus Investment and Hamilton Lane’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Fidus Investment 64.71% 9.01% 5.23%
Hamilton Lane 14.85% 66.32% 30.95%

Analyst Ratings

This is a summary of current ratings and target prices for Fidus Investment and Hamilton Lane, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Fidus Investment 0 1 0 0 2.00
Hamilton Lane 0 2 0 0 2.00

Fidus Investment presently has a consensus target price of $16.00, suggesting a potential upside of 3.56%. Hamilton Lane has a consensus target price of $40.50, suggesting a potential downside of 8.10%. Given Fidus Investment’s higher possible upside, equities research analysts plainly believe Fidus Investment is more favorable than Hamilton Lane.

Dividends

Fidus Investment pays an annual dividend of $1.56 per share and has a dividend yield of 10.1%. Hamilton Lane pays an annual dividend of $0.85 per share and has a dividend yield of 1.9%. Fidus Investment pays out 109.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Hamilton Lane pays out 51.8% of its earnings in the form of a dividend. Fidus Investment has raised its dividend for 4 consecutive years. Fidus Investment is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

28.8% of Fidus Investment shares are owned by institutional investors. Comparatively, 44.1% of Hamilton Lane shares are owned by institutional investors. 1.3% of Fidus Investment shares are owned by company insiders. Comparatively, 53.7% of Hamilton Lane shares are owned by company 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.

Risk & Volatility

Fidus Investment has a beta of 1.23, meaning that its stock price is 23% more volatile than the S&P 500. Comparatively, Hamilton Lane has a beta of 0.94, meaning that its stock price is 6% less volatile than the S&P 500.

Valuation and Earnings

This table compares Fidus Investment and Hamilton Lane’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Fidus Investment $76.43 million 4.94 $49.45 million $1.42 10.88
Hamilton Lane $244.03 million 9.05 $17.34 million $1.64 26.87

Fidus Investment has higher earnings, but lower revenue than Hamilton Lane. Fidus Investment is trading at a lower price-to-earnings ratio than Hamilton Lane, indicating that it is currently the more affordable of the two stocks.

Summary

Hamilton Lane beats Fidus Investment on 9 of the 15 factors compared between the two stocks.

Fidus Investment Company Profile

Fidus Investment Corporation is a business development company specializing in leveraged buyouts, refinancings, change of ownership transactions, recapitalizations, strategic acquisitions, mezzanine, growth capital, business expansion, lower middle market investments, debt investments, subordinated and second lien loans, senior secured and unitranche debt, preferred equity, warrants, subordinated debt, senior subordinated notes, junior secured loans, and unitranche loans. It does not invest in turnarounds or distressed situations. The fund prefers to invest in aerospace and defense, business services, consumer products and services including retail, food, and beverage, healthcare products and services, industrial products and services, information technology services, niche manufacturing, transportation and logistics, and value-added distribution sectors. It seeks to invest in companies based in United States. The fund typically invests between $5 million and $15 million per transaction in companies with annual revenues between $10 million and $150 million and an annual EBITDA between $3 million and $20 million, but it can occasionally invest in larger or smaller companies. It seeks to acquire minority equity stakes and board observation rights in conjunction with its investments.

Hamilton Lane Company Profile

Hamilton Lane Incorporated is an investment firm specializing in direct and fund of fund investments. It provides following services: separate accounts (customized to each individual client and structured as single client vehicles); specialized strategies (fund-of-funds, secondaries, co-investments, taft-hartley, distribution management); advisory relationships (including due diligence, strategic portfolio planning, monitoring and reporting services); and reporting and analytics solutions. For direct investments, the firm invests in mid and late venture, mature companies, growth equity, emerging growth, distressed debt, later stage, turnarounds, bridge financing, mezzanine financing, and buyouts in middle market companies. For fund of fund investments, it invests in mezzanine, venture capital, private equity, turnaround, secondary investments, real estate, and special situation funds. The firm invests in real estate investments. It also invest in technology, healthcare, education, natural resources, energy and essential consumer goods sectors, and cleantech. The firm prefer to invest $1 million to $100 million in companies. It invests in private equity markets in North America, Latin America, United States, Western Europe, Middle East, Africa, United Kingdom, Asia, Japan, and Australia. It prefer to have majority stake in companies. Hamilton Lane Incorporated was founded in 1991 and is based in Bala Cynwyd, Pennsylvania with additional thirteen offices across Europe, North America, and Asia.

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