Financial Contrast: Hpil (OTCMKTS:HPIL) versus Prospect Capital (NASDAQ:PSEC)

Hpil (OTCMKTS:HPIL) and Prospect Capital (NASDAQ:PSEC) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, risk, earnings, analyst recommendations, dividends, institutional ownership and profitability.

Insider & Institutional Ownership

9.1% of Prospect Capital shares are held by institutional investors. 84.8% of Hpil shares are held by insiders. Comparatively, 28.0% of Prospect Capital shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current ratings and target prices for Hpil and Prospect Capital, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hpil	0	0	0	0	0.00
Prospect Capital	2	0	0	0	1.00

Prospect Capital has a consensus price target of $2.50, suggesting a potential downside of 10.07%. Given Hpil’s higher possible upside, analysts clearly believe Hpil is more favorable than Prospect Capital.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Hpil	N/A	N/A	N/A
Prospect Capital	-69.68%	12.14%	5.59%

Valuation and Earnings

This table compares Hpil and Prospect Capital”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hpil	N/A	N/A	N/A	N/A	N/A
Prospect Capital	$719.44 million	1.80	-$469.92 million	($1.34)	-2.07

Hpil has higher earnings, but lower revenue than Prospect Capital.

Risk and Volatility

Hpil has a beta of 2.02, meaning that its share price is 102% more volatile than the S&P 500. Comparatively, Prospect Capital has a beta of 0.85, meaning that its share price is 15% less volatile than the S&P 500.

Summary

Prospect Capital beats Hpil on 5 of the 9 factors compared between the two stocks.

About Hpil

HPIL Holding, a development stage company, engages in developing technology projects in Canada. It also focuses on developing online and artificial intelligence games; and ZIPPA, a multi-gaming global platform for gamers, as well as powertrain management system. The company was formerly known as Cybernetic Technologies Ltd. and changed its name to HPIL Holding in August 2021. HPIL Holding was incorporated in 2009 and is headquartered in Vancouver, Canada.

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.