Capitala Finance (NASDAQ:CPTA) and PennantPark Floating Rate Capital (NASDAQ:PFLT) are both small-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, profitability, valuation, earnings, risk and dividends.
Analyst Ratings
This is a summary of current ratings and recommmendations for Capitala Finance and PennantPark Floating Rate Capital, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
Capitala Finance | 1 | 0 | 0 | 0 | 1.00 |
PennantPark Floating Rate Capital | 0 | 1 | 2 | 0 | 2.67 |
Capitala Finance currently has a consensus price target of $2.25, indicating a potential downside of 85.89%. PennantPark Floating Rate Capital has a consensus price target of $10.50, indicating a potential downside of 17.71%. Given PennantPark Floating Rate Capital's stronger consensus rating and higher probable upside, analysts clearly believe PennantPark Floating Rate Capital is more favorable than Capitala Finance.
Volatility and Risk
Capitala Finance has a beta of 1.85, indicating that its stock price is 85% more volatile than the S&P 500. Comparatively, PennantPark Floating Rate Capital has a beta of 1.97, indicating that its stock price is 97% more volatile than the S&P 500.
Earnings and Valuation
This table compares Capitala Finance and PennantPark Floating Rate Capital's revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
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Capitala Finance | $44.03 million | 0.98 | $-27,650,000.00 | $4.80 | 3.32 |
PennantPark Floating Rate Capital | $95.49 million | 5.18 | $18.41 million | $1.12 | 11.39 |
PennantPark Floating Rate Capital has higher revenue and earnings than Capitala Finance. Capitala 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.
Profitability
This table compares Capitala Finance and PennantPark Floating Rate Capital's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
Capitala Finance | -118.60% | 1.74% | 0.53% |
PennantPark Floating Rate Capital | 19.28% | 9.04% | 3.59% |
Institutional and Insider Ownership
14.4% of Capitala Finance shares are owned by institutional investors. Comparatively, 29.3% of PennantPark Floating Rate Capital shares are owned by institutional investors. 7.0% of Capitala Finance shares are owned by insiders. Comparatively, 2.0% of PennantPark Floating Rate Capital shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Summary
PennantPark Floating Rate Capital beats Capitala Finance on 12 of the 14 factors compared between the two stocks.