Comparing Metalpha Technology (NASDAQ:MATH) and Prospect Capital (NASDAQ:PSEC)

Metalpha Technology (NASDAQ:MATH) and Prospect Capital (NASDAQ:PSEC) are both small-cap computer and technology companies, but which is the better stock? We will compare the two companies based on the strength of their risk, dividends, institutional ownership, earnings, analyst recommendations, profitability and valuation.

Profitability

This table compares Metalpha Technology and Prospect Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Metalpha Technology	N/A	N/A	N/A
Prospect Capital	1.18%	12.31%	5.79%

Institutional and Insider Ownership

30.5% of Metalpha Technology shares are owned by institutional investors. Comparatively, 9.1% of Prospect Capital shares are owned by institutional investors. 5.9% of Metalpha Technology shares are owned by insiders. Comparatively, 28.3% of Prospect Capital shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Metalpha Technology and Prospect Capital”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Metalpha Technology	$30.86 million	2.41	-$3.68 million	N/A	N/A
Prospect Capital	$101.04 million	15.88	$262.83 million	($0.20)	-18.00

Prospect Capital has higher revenue and earnings than Metalpha Technology.

Analyst Ratings

This is a summary of current ratings for Metalpha Technology and Prospect Capital, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Metalpha Technology	0	0	0	0	0.00
Prospect Capital	1	0	0	0	1.00

Prospect Capital has a consensus price target of $3.50, indicating a potential downside of 2.78%. Given Prospect Capital’s stronger consensus rating and higher probable upside, analysts plainly believe Prospect Capital is more favorable than Metalpha Technology.

Dividends

Metalpha Technology pays an annual dividend of $0.10 per share and has a dividend yield of 5.2%. Prospect Capital pays an annual dividend of $0.54 per share and has a dividend yield of 15.0%. Prospect Capital pays out -270.0% of its earnings in the form of a dividend.

Risk and Volatility

Metalpha Technology has a beta of -1.24, suggesting that its share price is 224% less volatile than the S&P 500. Comparatively, Prospect Capital has a beta of 0.93, suggesting that its share price is 7% less volatile than the S&P 500.

Summary

Prospect Capital beats Metalpha Technology on 12 of the 13 factors compared between the two stocks.

About Metalpha Technology

Metalpha Technology Holding Limited, together with its subsidiaries, provides wealth management services in Hong Kong. The company offers digital asset-based wealth management services, which include issuing traditional financial and cryptocurrency derivative products to over-the-counter clients, providing crypto derivative market making services, and proprietary trading of digital assets and crypto derivative products; and securities advising and asset management services. It serves institutional investors and high-net-worth individuals. The company was formerly known as Dragon Victory International Limited and changed its name to Metalpha Technology Holding Limited in November 2022. The company was incorporated in 2015 and is headquartered in Wan Chai, Hong Kong.

About Prospect Capital

Prospect Capital Corporation is a business development company. It specializes in middle market, mature, mezzanine finance, later stage, emerging growth, leveraged buyouts, refinancing, acquisitions, recapitalizations, turnaround, growth capital, development, capital expenditures and subordinated debt tranches of collateralized loan obligations, cash flow term loans, market place lending and bridge transactions. It also makes real estate investments particularly in multi-family residential real estate asset class. The fund makes secured debt, senior debt, senior and secured term loans, unitranche debt, first-lien and second lien, private debt, private equity, mezzanine debt, and equity investments in private and microcap public businesses. It focuses on both primary origination and secondary loans/portfolios and invests in situations like debt financings for private equity sponsors, acquisitions, dividend recapitalizations, growth financings, bridge loans, cash flow term loans, real estate financings/investments. It also focuses on investing in small-sized and medium-sized private companies rather than large public companies. The fund typically invests across all industry sectors, with a particular expertise in the energy and industrial sectors. It invests in aerospace and defense, chemicals, conglomerate services, consumer services, ecological, electronics, financial services, machinery, manufacturing, media, pharmaceuticals, retail, software, specialty minerals, textiles and leather, transportation, oil and gas production, coal production, materials, industrials, consumer discretionary, information technology, utilities, pipeline, storage, power generation and distribution, renewable and clean energy, oilfield services, healthcare, food and beverage, education, business services, and other select sectors. It prefers to invest in the United States and Canada. The fund seeks to invest between $10 million to $500 million per transaction in companies with EBITDA between $5 million and $150 million, sales value between $25 million and $500 million, and enterprise value between $5 million and $1000 million. It fund also co-invests for larger deals. The fund seeks control acquisitions by providing multiple levels of the capital structure. The fund focuses on sole, agented, club, or syndicated deals.