Sprott (NYSE:SII) and Sound Point Meridian Capital (NYSE:SPMC) Financial Comparison

Sound Point Meridian Capital (NYSE:SPMC) and Sprott (NYSE:SII) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, dividends, profitability, valuation, earnings, risk and institutional ownership.

Risk & Volatility

Sound Point Meridian Capital has a beta of 0.32, suggesting that its share price is 68% less volatile than the S&P 500. Comparatively, Sprott has a beta of 1.02, suggesting that its share price is 2% more volatile than the S&P 500.

Profitability

This table compares Sound Point Meridian Capital and Sprott’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sound Point Meridian Capital	N/A	N/A	N/A
Sprott	23.26%	15.01%	11.97%

Earnings and Valuation

This table compares Sound Point Meridian Capital and Sprott”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sound Point Meridian Capital	N/A	N/A	N/A	$0.20	70.35
Sprott	$178.65 million	16.85	$49.29 million	$1.95	59.84

Sprott has higher revenue and earnings than Sound Point Meridian Capital. Sprott is trading at a lower price-to-earnings ratio than Sound Point Meridian Capital, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

28.3% of Sprott shares are held by institutional investors. 0.9% of Sound Point Meridian Capital shares are held by insiders. Comparatively, 18.3% of Sprott shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Dividends

Sound Point Meridian Capital pays an annual dividend of $3.00 per share and has a dividend yield of 21.3%. Sprott pays an annual dividend of $1.60 per share and has a dividend yield of 1.4%. Sound Point Meridian Capital pays out 1,500.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Sprott pays out 82.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Sprott has raised its dividend for 1 consecutive years.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Sound Point Meridian Capital and Sprott, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sound Point Meridian Capital	1	1	2	0	2.25
Sprott	0	2	3	0	2.60

Sound Point Meridian Capital currently has a consensus target price of $18.90, indicating a potential upside of 34.33%. Sprott has a consensus target price of $132.00, indicating a potential upside of 13.12%. Given Sound Point Meridian Capital’s higher possible upside, research analysts clearly believe Sound Point Meridian Capital is more favorable than Sprott.

Summary

Sprott beats Sound Point Meridian Capital on 12 of the 15 factors compared between the two stocks.

About Sound Point Meridian Capital

Sound Point Meridian Capital Inc. is an externally managed, non-diversified closed-end management investment company. Its investment objective is to generate high current income, with a secondary objective to generate capital appreciation, by investing primarily in third-party collateralized loan obligation equity and mezzanine tranches. Sound Point Meridian Capital Inc. is based in NEW YORK.

About Sprott

Sprott Inc. is a publicly owned asset management holding company. Through its subsidiaries, the firm provides asset management, portfolio management, wealth management, fund management, and administrative and consulting services to its clients. It offers mutual funds, hedge funds, and offshore funds, along with managed accounts. Further, the firm also provides broker-dealer activities. Sprott Inc. was formed on February 13, 2008 and is based in Toronto, Canada.