Hercules Capital (NYSE:HTGC) and Tekla Healthcare Investors (NYSE:HQH) are both small-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, earnings, dividends, analyst recommendations, institutional ownership, risk and valuation.
Earnings and Valuation
This table compares Hercules Capital and Tekla Healthcare Investors' revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
Hercules Capital | $267.87 million | 7.29 | $173.60 million | $1.41 | 11.99 |
Tekla Healthcare Investors | N/A | N/A | N/A | N/A | N/A |
Hercules Capital has higher revenue and earnings than Tekla Healthcare Investors.
Profitability
This table compares Hercules Capital and Tekla Healthcare Investors' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
Hercules Capital | 42.72% | 13.58% | 6.31% |
Tekla Healthcare Investors | N/A | N/A | N/A |
Analyst Recommendations
This is a breakdown of current ratings and price targets for Hercules Capital and Tekla Healthcare Investors, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
Hercules Capital | 0 | 0 | 8 | 0 | 3.00 |
Tekla Healthcare Investors | 0 | 0 | 0 | 0 | N/A |
Hercules Capital currently has a consensus price target of $13.8438, suggesting a potential downside of 18.08%. Given Hercules Capital's higher probable upside, equities analysts clearly believe Hercules Capital is more favorable than Tekla Healthcare Investors.
Insider and Institutional Ownership
28.9% of Hercules Capital shares are held by institutional investors. Comparatively, 22.2% of Tekla Healthcare Investors shares are held by institutional investors. 3.3% of Hercules Capital shares are held by insiders. Comparatively, 7.3% of Tekla Healthcare Investors 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.
Dividends
Hercules Capital pays an annual dividend of $1.28 per share and has a dividend yield of 7.6%. Tekla Healthcare Investors pays an annual dividend of $1.89 per share and has a dividend yield of 7.8%. Hercules Capital pays out 90.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Hercules Capital has raised its dividend for 1 consecutive years and Tekla Healthcare Investors has raised its dividend for 1 consecutive years.
Volatility and Risk
Hercules Capital has a beta of 1.57, meaning that its share price is 57% more volatile than the S&P 500. Comparatively, Tekla Healthcare Investors has a beta of 1.11, meaning that its share price is 11% more volatile than the S&P 500.
Summary
Hercules Capital beats Tekla Healthcare Investors on 8 of the 11 factors compared between the two stocks.