Analyzing Equus Total Return (NYSE:EQS) and Templeton Dragon Fund (NYSE:TDF)

Equus Total Return (NYSE:EQS) and Templeton Dragon Fund (NYSE:TDF) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, earnings, dividends, profitability, risk, institutional ownership and analyst recommendations.

Risk and Volatility

Equus Total Return has a beta of 0.7, suggesting that its stock price is 30% less volatile than the S&P 500. Comparatively, Templeton Dragon Fund has a beta of 0.33, suggesting that its stock price is 67% less volatile than the S&P 500.

Profitability

This table compares Equus Total Return and Templeton Dragon Fund’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Equus Total Return	-1,212.18%	-8.77%	-6.08%
Templeton Dragon Fund	N/A	N/A	N/A

Analyst Ratings

This is a breakdown of current ratings and price targets for Equus Total Return and Templeton Dragon Fund, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Equus Total Return	1	0	0	0	1.00
Templeton Dragon Fund	0	0	0	0	0.00

Valuation and Earnings

This table compares Equus Total Return and Templeton Dragon Fund”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Equus Total Return	-$12.16 million	-2.18	-$18.78 million	($1.25)	-1.56
Templeton Dragon Fund	N/A	N/A	N/A	N/A	N/A

Templeton Dragon Fund has higher revenue and earnings than Equus Total Return.

Institutional and Insider Ownership

47.2% of Templeton Dragon Fund shares are owned by institutional investors. 29.9% of Equus Total Return shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

Templeton Dragon Fund beats Equus Total Return on 5 of the 8 factors compared between the two stocks.

About Equus Total Return

Equus Total Return, Inc. is a business development company (BDC) specializing in leveraged buyouts, management buyouts, corporate partnerships/joint ventures, growth and expansion capital, acquisition financing, roll-up acquisition strategies, operational turnarounds, recapitalizations of existing businesses, special situations, equity and equity-oriented securities issued by privately owned companies, debt securities including subordinate debt, debt convertible into common or preferred stock, or debt combined with warrants and common and preferred stock, and preferred equity financing. It invests in small to mid-sized companies and acts as a lead investor. It invests in technology, telecommunication, financial services, natural resource and industrial manufacturing and services. It invests in companies engaged in the alternative energy, real estate, healthcare, education, e-learning, leisure and entertainment, and foreign investment sector in the United States, China, India, and Europe. It investments include common and preferred stock, debt convertible into common or preferred stock, debt combined with warrants and options, and other rights to acquire common or preferred stock. It seeks to invest in companies between $1 million to $25 million with revenues between $5 million and $150 million with EBITDA between $2 million to $50 million. It seeks to take control and non-control equity positions. Equus Total Return, Inc. was founded in 1991 and is based in Houston, Texas with additional office in Vancouver, Canada.

About Templeton Dragon Fund

Templeton Dragon Fund, Inc. is a closed ended equity mutual fund launched by Franklin Resources, Inc. The fund is managed by Templeton Asset Management Ltd. It invests in the public equity markets of China. The fund seeks to invest in stocks of companies operating across diversified sectors. It primarily invests in value stocks of companies. The fund employs fundamental analysis focusing on factors like growth prospects, competitive positions in export markets, technologies, research and development, productivity, labor costs, raw material costs and sources, profit margins, returns on investment, capital resources, government regulation, and management to create its portfolio. It is actively managed. Templeton Dragon Fund, Inc. was formed on September 20, 1994 and is domiciled in the United States.