TriplePoint Venture Growth BDC (NYSE:TPVG) and PennantPark Floating Rate Capital (NASDAQ:PFLT) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, risk, profitability, valuation, dividends, institutional ownership and analyst recommendations.
Analyst Recommendations
This is a breakdown of current ratings and recommmendations for TriplePoint Venture Growth BDC and PennantPark Floating Rate Capital, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| TriplePoint Venture Growth BDC | 0 | 2 | 4 | 0 | 2.67 |
| PennantPark Floating Rate Capital | 0 | 1 | 2 | 0 | 2.67 |
TriplePoint Venture Growth BDC presently has a consensus price target of $10.9583, indicating a potential downside of 30.25%. PennantPark Floating Rate Capital has a consensus price target of $10.50, indicating a potential downside of 17.13%. Given PennantPark Floating Rate Capital's higher probable upside, analysts plainly believe PennantPark Floating Rate Capital is more favorable than TriplePoint Venture Growth BDC.
Risk and Volatility
TriplePoint Venture Growth BDC has a beta of 1.9, meaning that its share price is 90% more volatile than the S&P 500. Comparatively, PennantPark Floating Rate Capital has a beta of 1.97, meaning that its share price is 97% more volatile than the S&P 500.
Insider and Institutional Ownership
26.9% of TriplePoint Venture Growth BDC shares are owned by institutional investors. Comparatively, 29.3% of PennantPark Floating Rate Capital shares are owned by institutional investors. 1.2% of TriplePoint Venture Growth BDC shares are owned by company insiders. Comparatively, 2.0% of PennantPark Floating Rate Capital 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.
Dividends
TriplePoint Venture Growth BDC pays an annual dividend of $1.44 per share and has a dividend yield of 9.2%. PennantPark Floating Rate Capital pays an annual dividend of $1.14 per share and has a dividend yield of 9.0%. TriplePoint Venture Growth BDC pays out 93.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. PennantPark Floating Rate Capital pays out 101.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. TriplePoint Venture Growth BDC has raised its dividend for 1 consecutive years and PennantPark Floating Rate Capital has raised its dividend for 1 consecutive years. TriplePoint Venture Growth BDC is clearly the better dividend stock, given its higher yield and lower payout ratio.
Profitability
This table compares TriplePoint Venture Growth BDC and PennantPark Floating Rate Capital's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| TriplePoint Venture Growth BDC | 40.65% | 12.21% | 6.54% |
| PennantPark Floating Rate Capital | 19.28% | 9.04% | 3.59% |
Earnings and Valuation
This table compares TriplePoint Venture Growth BDC 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 |
|---|
| TriplePoint Venture Growth BDC | $73.39 million | 6.61 | $31.76 million | $1.54 | 10.20 |
| PennantPark Floating Rate Capital | $95.49 million | 5.14 | $18.41 million | $1.12 | 11.31 |
TriplePoint Venture Growth BDC has higher earnings, but lower revenue than PennantPark Floating Rate Capital. TriplePoint Venture Growth BDC 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.
Summary
TriplePoint Venture Growth BDC beats PennantPark Floating Rate Capital on 9 of the 15 factors compared between the two stocks.
