Contrasting Medallion Financial (NASDAQ:MFIN) & TriplePoint Venture Growth BDC (NYSE:TPVG)

TriplePoint Venture Growth BDC (NYSE:TPVG) and Medallion Financial (NASDAQ:MFIN) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, analyst recommendations, profitability, valuation, dividends, institutional ownership and earnings.

Dividends

TriplePoint Venture Growth BDC pays an annual dividend of $1.20 per share and has a dividend yield of 17.0%. Medallion Financial pays an annual dividend of $0.48 per share and has a dividend yield of 4.9%. TriplePoint Venture Growth BDC pays out 129.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Medallion Financial pays out 30.0% of its earnings in the form of a dividend.

Institutional and Insider Ownership

12.8% of TriplePoint Venture Growth BDC shares are held by institutional investors. Comparatively, 40.6% of Medallion Financial shares are held by institutional investors. 1.5% of TriplePoint Venture Growth BDC shares are held by insiders. Comparatively, 24.6% of Medallion Financial shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares TriplePoint Venture Growth BDC and Medallion Financial”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TriplePoint Venture Growth BDC	$108.65 million	2.61	$32.05 million	$0.93	7.59
Medallion Financial	$302.03 million	0.75	$35.88 million	$1.60	6.11

Medallion Financial has higher revenue and earnings than TriplePoint Venture Growth BDC. Medallion Financial is trading at a lower price-to-earnings ratio than TriplePoint Venture Growth BDC, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current recommendations for TriplePoint Venture Growth BDC and Medallion Financial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TriplePoint Venture Growth BDC	1	5	0	0	1.83
Medallion Financial	0	0	0	0	0.00

TriplePoint Venture Growth BDC currently has a consensus target price of $6.79, suggesting a potential downside of 3.80%. Given TriplePoint Venture Growth BDC’s stronger consensus rating and higher possible upside, research analysts clearly believe TriplePoint Venture Growth BDC is more favorable than Medallion Financial.

Volatility & Risk

TriplePoint Venture Growth BDC has a beta of 1.46, suggesting that its share price is 46% more volatile than the S&P 500. Comparatively, Medallion Financial has a beta of 1.33, suggesting that its share price is 33% more volatile than the S&P 500.

Profitability

This table compares TriplePoint Venture Growth BDC and Medallion Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TriplePoint Venture Growth BDC	36.10%	14.12%	6.53%
Medallion Financial	11.96%	8.70%	1.33%

Summary

TriplePoint Venture Growth BDC beats Medallion Financial on 9 of the 15 factors compared between the two stocks.

About TriplePoint Venture Growth BDC

TriplePoint Venture Growth BDC Corp. is a business development company specializing investments in venture capital-backed companies at the growth stage investments. It also provides debt financing to venture growth space companies which includes growth capital loans, secured and customized loans, equipment financings, revolving loans and direct equity investments. The fund seeks to invest in e-commerce, entertainment, technology and life sciences sector. Within technology the areas of focus include: Security, wireless communication equipments, network system and software, business applications software, conferencing equipments/services .big data, cloud computing, data storage, electronics, energy efficiency, hardware, information services, internet and media, networking, semiconductors, software, software as a service, and other technology related subsectors and within life sciences the areas of focus include: biotechnology, bio fuels/bio mass, diagnostic testing and bioinformatics, drug delivery, drug discovery, healthcare information systems, healthcare services, medical, surgical and therapeutic devices, pharmaceuticals and other life science related subsectors. Within growth capital loans it invests between $5 million and $50 million, for equipment financings it invests between $5 million and $25 million, for revolving loans it invests between $1 million and $25 million, and for direct equity investments it may invest between $0.1 million and $5 million (generally not exceeding 5% of the company’s total equity). The debt financing products are typically structured as lines of credit and it invests through warrants and secured loans. It targeted returns between 10% and 18%. It does not take board seat in the company.

About Medallion Financial

Medallion Financial Corp., together with its subsidiaries, operates as a specialty finance company in the United States. It operates in four segments: Recreation Lending, Home Improvement Lending, Commercial Lending, and Taxi Medallion Lending. The company offers loans that finance consumer purchases of recreational vehicles, boats, and other consumer recreational equipment; consumer financing for window, siding, and roof replacement, swimming pool installations, and other home improvement projects; senior and subordinated loans for the purchase of equipment and related assets necessary to open a new business, or purchase or improvement of an existing business; and taxi medallion loans to individuals and small to mid-size businesses. It also provides debt, mezzanine, and equity investment capital to companies in various commercial 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.