Portman Ridge Finance (NASDAQ:PTMN) and Pennantpark Floating Rate Capital (NASDAQ:PFLT) are both small-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their risk, valuation, profitability, earnings, dividends, analyst recommendations and institutional ownership.
Portman Ridge Finance pays an annual dividend of $0.40 per share and has a dividend yield of 13.4%. Pennantpark Floating Rate Capital pays an annual dividend of $1.14 per share and has a dividend yield of 8.7%. Portman Ridge Finance pays out 148.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Pennantpark Floating Rate Capital pays out 107.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
This is a breakdown of current recommendations for Portman Ridge Finance and Pennantpark Floating Rate Capital, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Portman Ridge Finance||0||0||0||0||N/A|
|Pennantpark Floating Rate Capital||0||0||2||0||3.00|
Pennantpark Floating Rate Capital has a consensus target price of $14.25, indicating a potential upside of 8.94%. Given Pennantpark Floating Rate Capital’s higher probable upside, analysts clearly believe Pennantpark Floating Rate Capital is more favorable than Portman Ridge Finance.
Risk & Volatility
Portman Ridge Finance has a beta of 0.97, indicating that its stock price is 3% less volatile than the S&P 500. Comparatively, Pennantpark Floating Rate Capital has a beta of 0.71, indicating that its stock price is 29% less volatile than the S&P 500.
This table compares Portman Ridge Finance and Pennantpark Floating Rate Capital’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Portman Ridge Finance||-35.34%||5.81%||3.52%|
|Pennantpark Floating Rate Capital||45.40%||8.24%||4.50%|
Insider & Institutional Ownership
27.6% of Portman Ridge Finance shares are held by institutional investors. Comparatively, 36.4% of Pennantpark Floating Rate Capital shares are held by institutional investors. 8.1% of Portman Ridge Finance shares are held by insiders. Comparatively, 1.0% of Pennantpark Floating Rate Capital shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Earnings & Valuation
This table compares Portman Ridge Finance and Pennantpark Floating Rate Capital’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Portman Ridge Finance||$27.09 million||4.11||-$9.57 million||$0.27||11.04|
|Pennantpark Floating Rate Capital||$72.21 million||7.02||$33.49 million||$1.06||12.34|
Pennantpark Floating Rate Capital has higher revenue and earnings than Portman Ridge Finance. Portman Ridge Finance is trading at a lower price-to-earnings ratio than Pennantpark Floating Rate Capital, indicating that it is currently the more affordable of the two stocks.
Pennantpark Floating Rate Capital beats Portman Ridge Finance on 12 of the 15 factors compared between the two stocks.
Portman Ridge Finance Company Profile
There is no company description available for Portman Ridge Finance Corp.
Pennantpark Floating Rate Capital Company Profile
PennantPark Floating Rate Capital Ltd. is a business development company. It seeks to make secondary direct, debt, equity, and loan investments. The fund seeks to invest through floating rate loans in private or thinly traded or small market-cap, public middle market companies. It primarily invests in the United States and to a limited extent non-U.S. companies. The fund typically invests between $2 million and $20 million. The fund also invests in equity securities, such as preferred stock, common stock, warrants or options received in connection with debt investments or through direct investments. It primarily invests between $10 million and $50 million in investments in senior secured loans and mezzanine debt. It seeks to invest in companies not rated by national rating agencies. The companies if rated would be between BB and CCC under the Standard & Poor's system. The fund invests 30% is invested in non-qualifying assets like investments in public companies whose securities are not thinly traded or do not have a market capitalization of less than $250 million, securities of middle-market companies located outside of the United States, high-yield bonds, distressed debt, private equity, securities of public companies that are not thinly traded, and investment companies as defined in the 1940 Act. Under normal conditions, the fund expects atleast 80 percent of its net assets plus any borrowings for investment purposes to be invested in Floating Rate Loans and investments with similar economic characteristics, including cash equivalents invested in money market funds. It expects to represent 65 percent of its portfolio through senior secured loans. In case of floating rate loans, it holds investments for a period of three to ten years.
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