Chicago Atlantic BDC (NASDAQ:LIEN – Get Free Report) and Medallion Financial (NASDAQ:MFIN – Get Free Report) are both small-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, institutional ownership, earnings, risk, dividends and valuation.
Dividends
Chicago Atlantic BDC pays an annual dividend of $1.36 per share and has a dividend yield of 12.4%. Medallion Financial pays an annual dividend of $0.48 per share and has a dividend yield of 4.5%. Chicago Atlantic BDC pays out 367.6% 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.
Valuation and Earnings
This table compares Chicago Atlantic BDC and Medallion Financial”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Chicago Atlantic BDC | $31.43 million | 7.99 | $9.62 million | $0.37 | 29.76 |
| Medallion Financial | $302.03 million | 0.81 | $35.88 million | $1.76 | 6.00 |
Medallion Financial has higher revenue and earnings than Chicago Atlantic BDC. Medallion Financial is trading at a lower price-to-earnings ratio than Chicago Atlantic BDC, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
Chicago Atlantic BDC has a beta of 0.28, suggesting that its share price is 72% less volatile than the S&P 500. Comparatively, Medallion Financial has a beta of 1.42, suggesting that its share price is 42% more volatile than the S&P 500.
Insider and Institutional Ownership
4.4% of Chicago Atlantic BDC shares are owned by institutional investors. Comparatively, 40.6% of Medallion Financial shares are owned by institutional investors. 16.9% of Chicago Atlantic BDC shares are owned by company insiders. Comparatively, 24.6% of Medallion Financial shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Analyst Recommendations
This is a breakdown of recent ratings and target prices for Chicago Atlantic BDC and Medallion Financial, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Chicago Atlantic BDC | 0 | 3 | 0 | 0 | 2.00 |
| Medallion Financial | 0 | 0 | 1 | 0 | 3.00 |
Medallion Financial has a consensus target price of $12.00, indicating a potential upside of 13.64%. Given Medallion Financial’s stronger consensus rating and higher probable upside, analysts clearly believe Medallion Financial is more favorable than Chicago Atlantic BDC.
Profitability
This table compares Chicago Atlantic BDC and Medallion Financial’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Chicago Atlantic BDC | 21.50% | 3.25% | 3.07% |
| Medallion Financial | 12.62% | 9.04% | 1.46% |
Summary
Medallion Financial beats Chicago Atlantic BDC on 11 of the 16 factors compared between the two stocks.
About Chicago Atlantic BDC
Chicago Atlantic BDC Inc. is a specialty finance company which has elected to be regulated as a business development company. Its investment objective is to maximize risk-adjusted returns on equity for its stockholders by investing primarily in direct loans to privately held middle-market companies, with a primary focus on cannabis companies. Chicago Atlantic BDC Inc., formerly known as CHICAGO ATLNTIC, is based in NEW YORK.
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.
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