Head to Head Survey: SLR Investment (NASDAQ:SLRC) & Trinity Capital (NASDAQ:TRIN)

Trinity Capital (NASDAQ:TRIN) and SLR Investment (NASDAQ:SLRC) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their analyst recommendations, valuation, dividends, profitability, earnings, institutional ownership and risk.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Trinity Capital and SLR Investment, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Trinity Capital	1	1	1	1	2.50
SLR Investment	2	2	2	1	2.29

Trinity Capital presently has a consensus price target of $15.13, indicating a potential upside of 4.17%. SLR Investment has a consensus price target of $15.96, indicating a potential downside of 0.72%. Given Trinity Capital’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Trinity Capital is more favorable than SLR Investment.

Risk and Volatility

Trinity Capital has a beta of 0.55, meaning that its share price is 45% less volatile than the S&P 500. Comparatively, SLR Investment has a beta of 0.74, meaning that its share price is 26% less volatile than the S&P 500.

Insider & Institutional Ownership

24.6% of Trinity Capital shares are owned by institutional investors. Comparatively, 35.3% of SLR Investment shares are owned by institutional investors. 5.3% of Trinity Capital shares are owned by company insiders. Comparatively, 8.6% of SLR Investment shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Dividends

Trinity Capital pays an annual dividend of $2.04 per share and has a dividend yield of 14.0%. SLR Investment pays an annual dividend of $1.64 per share and has a dividend yield of 10.2%. Trinity Capital pays out 93.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. SLR Investment pays out 101.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Trinity Capital has increased its dividend for 1 consecutive years. Trinity Capital is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Trinity Capital and SLR Investment’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Trinity Capital	50.74%	15.91%	7.16%
SLR Investment	38.60%	9.53%	3.84%

Valuation and Earnings

This table compares Trinity Capital and SLR Investment”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Trinity Capital	$237.69 million	3.95	$115.60 million	$2.19	6.63
SLR Investment	$232.43 million	N/A	$95.76 million	$1.61	9.99

Trinity Capital has higher revenue and earnings than SLR Investment. Trinity Capital is trading at a lower price-to-earnings ratio than SLR Investment, indicating that it is currently the more affordable of the two stocks.

Summary

Trinity Capital beats SLR Investment on 11 of the 16 factors compared between the two stocks.

About Trinity Capital

Trinity Capital Inc. is a business development company. It is a venture capital firm specializing in venture debt to growth stage companies looking for loans and/or equipment financing. Trinity Capital Inc. was founded in 2019 is based in Phoenix, Arizona with additional offices in the United States.

About SLR Investment

SLR Investment Corp. is a business development company specializing in secured debt (first lien unitranche and second lien), subordinated (unsecured) debt, minority equity, leveraged buyouts, acquisitions, recapitalizations, general refinancing, growth capital and strategic income-oriented control equity investments in leveraged middle market companies. The fund invests in aerospace and defense; air freight & logistics; asset management; automotive; banking; beverage, food and tobacco; building products; buildings and real estate; broadcasting and entertainment; cargo transport; commercial services and supplies; communications equipment; chemicals, plastics and rubber; containers, packaging and glass; construction & engineering; diversified/conglomerate manufacturing; consumer Finance; distributors; diversified/conglomerate services; diversified financial services; diversified real estate activities; food products; Footwear; Education Services; diversified telecommunications services; electronics; farming and agriculture; finance; grocery; health care equipment and supplies; health care facilities; education and childcare; home and office furnishing, durable consumer products; hotels, motels, inns and gaming; insurance; restaurants, leisure, amusement, and entertainment; leisure equipment tolls and services, media, multiline retail, multi sector holdings; paper and forest products; personal products; professional services, research and consulting services, software; specialty retail; textiles apparel and luxury goods, thrifts and mortgage finance, trading companies and distributors, utilities, and wireless telecommunication services; industrial conglomerates; internet software and services, IT services, machinery; mining, steel, iron, and non-precious metals; oil and gas; personal, food and miscellaneous services; printing and publishing; retail stores; telecommunications; textiles and leather; and utilities. It also invests in life sciences with focus on specialty pharmaceuticals, medical devices, biotech, health Care Providers and services; health Care technology, enabling technologies and tools. The fund primarily invests in United States. The fund’s investments generally range between $5 million and $100 million. The fund invests in companies with revenues between $50 million and $1 billion and EBITDA between $15 million and $100 million. It invests in the form of senior secured loans, mezzanine loans, and equity securities. It may also seek investments in thinly traded public companies and also make secondary investments. The fund makes non-control equity investments. It primarily exits within three years of the initial capital commitment.