Amalgamated Financial (NASDAQ:AMAL) versus Chicago Atlantic BDC (NASDAQ:LIEN) Critical Analysis

Chicago Atlantic BDC (NASDAQ:LIEN) and Amalgamated Financial (NASDAQ:AMAL) are both small-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, risk, earnings, institutional ownership, profitability, dividends and analyst recommendations.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Chicago Atlantic BDC and Amalgamated 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
Amalgamated Financial	0	2	1	0	2.33

Amalgamated Financial has a consensus target price of $33.50, indicating a potential upside of 3.84%. Given Amalgamated Financial’s stronger consensus rating and higher possible upside, analysts clearly believe Amalgamated Financial is more favorable than Chicago Atlantic BDC.

Institutional & Insider Ownership

4.4% of Chicago Atlantic BDC shares are held by institutional investors. Comparatively, 75.9% of Amalgamated Financial shares are held by institutional investors. 16.9% of Chicago Atlantic BDC shares are held by insiders. Comparatively, 1.3% of Amalgamated Financial shares are held by 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.

Risk and Volatility

Chicago Atlantic BDC has a beta of 0.26, suggesting that its share price is 74% less volatile than the S&P 500. Comparatively, Amalgamated Financial has a beta of 0.84, suggesting that its share price is 16% less volatile than the S&P 500.

Profitability

This table compares Chicago Atlantic BDC and Amalgamated Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Chicago Atlantic BDC	33.72%	5.80%	5.46%
Amalgamated Financial	22.97%	14.75%	1.30%

Dividends

Chicago Atlantic BDC pays an annual dividend of $1.36 per share and has a dividend yield of 12.4%. Amalgamated Financial pays an annual dividend of $0.56 per share and has a dividend yield of 1.7%. Chicago Atlantic BDC pays out 172.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Amalgamated Financial pays out 16.9% of its earnings in the form of a dividend. Amalgamated Financial has increased its dividend for 4 consecutive years.

Earnings and Valuation

This table compares Chicago Atlantic BDC and Amalgamated Financial”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Chicago Atlantic BDC	$39.86 million	6.26	$9.62 million	$0.79	13.85
Amalgamated Financial	$323.80 million	2.98	$106.43 million	$3.32	9.72

Amalgamated Financial has higher revenue and earnings than Chicago Atlantic BDC. Amalgamated 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.

Summary

Amalgamated Financial beats Chicago Atlantic BDC on 11 of the 17 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 Amalgamated Financial

Amalgamated Financial Corp. operates as the bank holding company for Amalgamated Bank that provides commercial and retail banking, investment management, and trust and custody services for commercial and retail customers in the United States. The company accepts various deposit products, including non-interest bearing accounts, interest-bearing demand products, savings accounts, money market accounts, NOW accounts, and certificates of deposit. It also provides various commercial loans comprising commercial and industrial, multifamily mortgage, and commercial real estate loans; residential mortgage loans; and retail loans, such as residential real estate, consumer solar, and consumer and other loans. In addition, the company offers online banking, bill payment, online cash management, and safe deposit box rental services; debit and ATM cards; and trust, custody, and investment management services comprising asset safekeeping, corporate actions, income collections, proxy, account transition, asset transfers, and conversion management services. Further, it provides investment products, such as funds spanning equity, fixed-income, real estate, and alternative investment products; and brokerage, asset management, and insurance products. Amalgamated Financial Corp. was founded in 1923 and is headquartered in New York, New York.