Financial Review: Medallion Financial (NASDAQ:MFIN) versus Sunlight Financial (NYSE:SUNL)

Medallion Financial (NASDAQ:MFINGet Rating) and Sunlight Financial (NYSE:SUNLGet Rating) are both small-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their dividends, risk, analyst recommendations, profitability, institutional ownership, earnings and valuation.

Insider and Institutional Ownership

31.4% of Medallion Financial shares are held by institutional investors. Comparatively, 23.5% of Sunlight Financial shares are held by institutional investors. 18.4% of Medallion Financial shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Medallion Financial and Sunlight Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Medallion Financial 28.40% 16.28% 3.05%
Sunlight Financial N/A -3.95% -2.69%

Earnings & Valuation

This table compares Medallion Financial and Sunlight Financial’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Medallion Financial $190.53 million 1.05 $54.11 million $2.17 3.61
Sunlight Financial $114.74 million 4.79 -$153.43 million N/A N/A

Medallion Financial has higher revenue and earnings than Sunlight Financial.

Analyst Recommendations

This is a summary of recent ratings and price targets for Medallion Financial and Sunlight Financial, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Medallion Financial 0 0 1 0 3.00
Sunlight Financial 0 0 6 0 3.00

Medallion Financial currently has a consensus price target of $12.00, indicating a potential upside of 53.26%. Sunlight Financial has a consensus price target of $8.67, indicating a potential upside of 108.84%. Given Sunlight Financial’s higher possible upside, analysts plainly believe Sunlight Financial is more favorable than Medallion Financial.

Risk & Volatility

Medallion Financial has a beta of 2.44, indicating that its share price is 144% more volatile than the S&P 500. Comparatively, Sunlight Financial has a beta of 0.98, indicating that its share price is 2% less volatile than the S&P 500.

Summary

Medallion Financial beats Sunlight Financial on 8 of the 11 factors compared between the two stocks.

About Medallion Financial (Get Rating)

Medallion Financial Corp., together with its subsidiaries, operates as a finance company in the United States. The company operates through four segments: Recreation Lending, Home Improvement Lending, Commercial Lending, and Medallion Lending. It provides loans that finance consumer purchases of recreational vehicles, boats, and trailers; consumer home improvements; commercial businesses; and taxi medallions to individuals, and small to mid-size businesses. The company also offers commercial loans for purchase of equipment and related assets necessary to open a new business, or purchase or improvement of an existing business; and medallion loans. In addition, it provides debt, mezzanine, and equity investment capital to companies in various industries; and raises deposits and conducts other banking activities. Medallion Financial Corp. was incorporated in 1995 and is headquartered in New York City, New York.

About Sunlight Financial (Get Rating)

Sunlight Financial Holdings Inc. operates a business-to-business-to-consumer technology-enabled point-of-sale financing platform in the United States. Its platform is used to provide secured and unsecured loans for homeowners originated by third-party lenders to purchase and install residential solar energy systems, and other home improvements. The company was founded in 2014 and is based in Charlotte, North Carolina.

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