Reviewing Investcorp Credit Management BDC (NASDAQ:ICMB) & Medallion Financial (NASDAQ:MFIN)

Investcorp Credit Management BDC (NASDAQ:ICMB) and Medallion Financial (NASDAQ:MFIN) 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, valuation, institutional ownership, analyst recommendations, profitability, risk and earnings.

Dividends

Investcorp Credit Management BDC pays an annual dividend of $0.48 per share and has a dividend yield of 17.7%. Medallion Financial pays an annual dividend of $0.48 per share and has a dividend yield of 4.6%. Investcorp Credit Management BDC pays out 109.1% 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 27.3% of its earnings in the form of a dividend. Investcorp Credit Management BDC has raised its dividend for 1 consecutive years. Investcorp Credit Management BDC is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares Investcorp Credit Management 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
Investcorp Credit Management BDC	$23.88 million	1.64	-$4.09 million	$0.44	6.16
Medallion Financial	$302.03 million	0.80	$35.88 million	$1.76	5.89

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

Profitability

This table compares Investcorp Credit Management BDC and Medallion Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Investcorp Credit Management BDC	29.82%	6.51%	2.50%
Medallion Financial	12.62%	9.51%	1.46%

Risk and Volatility

Investcorp Credit Management BDC has a beta of 0.83, suggesting that its share price is 17% less volatile than the S&P 500. Comparatively, Medallion Financial has a beta of 1.28, suggesting that its share price is 28% more volatile than the S&P 500.

Insider & Institutional Ownership

7.8% of Investcorp Credit Management BDC shares are held by institutional investors. Comparatively, 40.6% of Medallion Financial shares are held by institutional investors. 1.2% of Investcorp Credit Management BDC shares are held by insiders. Comparatively, 24.6% of Medallion Financial shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Investcorp Credit Management BDC and Medallion Financial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Investcorp Credit Management BDC	0	0	0	0	0.00
Medallion Financial	0	0	1	0	3.00

Medallion Financial has a consensus price target of $12.00, suggesting a potential upside of 15.72%. Given Medallion Financial’s stronger consensus rating and higher possible upside, analysts plainly believe Medallion Financial is more favorable than Investcorp Credit Management BDC.

Summary

Medallion Financial beats Investcorp Credit Management BDC on 11 of the 17 factors compared between the two stocks.

About Investcorp Credit Management BDC

Investcorp Credit Management BDC, Inc. is a business development company specializing in loan, mezzanine, middle market, growth capital, acquisitions, market/product expansion, organic growth, refinancings and recapitalization investments. It also selectively invests in mezzanine loans/structured equity and in the equity of portfolio companies through warrants and other instruments, in most cases taking such upside participation interests as part of a broader investment relationship. The fund typically invests in United States and Europe. Within United States, the fund seeks to invest in Midatlantic, Midwest, Northeast, Southeast, and West Coast regions. The fund primarily invests in cable and satellites; consumer services; healthcare equipment and services; industrials; information technology; telecommunication services; and utilities sectors. The fund seeks to invest between $5 million to $25 million in companies that have annual revenues of at least $50 million with EBITDA at least $15 million.

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.