Amalgamated Financial (NASDAQ:AMAL) versus Runway Growth Finance (NASDAQ:RWAY) Head to Head Analysis

Runway Growth Finance (NASDAQ:RWAY) and Amalgamated Financial (NASDAQ:AMAL) are both small-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, dividends, institutional ownership, valuation, risk, analyst recommendations and earnings.

Insider and Institutional Ownership

64.6% of Runway Growth Finance shares are owned by institutional investors. Comparatively, 75.9% of Amalgamated Financial shares are owned by institutional investors. 1.0% of Runway Growth Finance shares are owned by company insiders. Comparatively, 1.6% of Amalgamated Financial shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Runway Growth Finance and Amalgamated Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Runway Growth Finance	-2.00%	10.87%	5.37%
Amalgamated Financial	22.33%	13.89%	1.23%

Volatility and Risk

Runway Growth Finance has a beta of 0.66, meaning that its share price is 34% less volatile than the S&P 500. Comparatively, Amalgamated Financial has a beta of 0.79, meaning that its share price is 21% less volatile than the S&P 500.

Dividends

Runway Growth Finance pays an annual dividend of $1.32 per share and has a dividend yield of 23.4%. Amalgamated Financial pays an annual dividend of $0.68 per share and has a dividend yield of 1.4%. Runway Growth Finance pays out -1,466.7% of its earnings in the form of a dividend. Amalgamated Financial pays out 19.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Amalgamated Financial has raised its dividend for 4 consecutive years. Runway Growth Finance is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation & Earnings

This table compares Runway Growth Finance and Amalgamated Financial”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Runway Growth Finance	$137.33 million	1.74	$34.05 million	($0.09)	-62.56
Amalgamated Financial	$453.17 million	3.14	$104.45 million	$3.44	13.86

Amalgamated Financial has higher revenue and earnings than Runway Growth Finance. Runway Growth Finance is trading at a lower price-to-earnings ratio than Amalgamated Financial, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Runway Growth Finance and Amalgamated Financial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Runway Growth Finance	3	3	2	0	1.88
Amalgamated Financial	0	2	1	0	2.33

Runway Growth Finance presently has a consensus target price of $8.20, indicating a potential upside of 45.65%. Amalgamated Financial has a consensus target price of $48.00, indicating a potential upside of 0.69%. Given Runway Growth Finance’s higher possible upside, analysts clearly believe Runway Growth Finance is more favorable than Amalgamated Financial.

Summary

Amalgamated Financial beats Runway Growth Finance on 12 of the 17 factors compared between the two stocks.

About Runway Growth Finance

Runway Growth Finance Corp. is a business development company specializing investments in senior-secured loans to late stage and growth companies. It prefers to make investments in companies engaged in the technology, life sciences, healthcare and information services, business services and select consumer services and products sectors. It prefers to investments in companies engaged in electronic equipment and instruments, systems software, hardware, storage and peripherals and specialized consumer services, application software, healthcare technology, internet software and services, data processing and outsourced services, internet retail, human resources and employment services, biotechnology, healthcare equipment and education services. It invests in senior secured loans between $10 million and $75 million.

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.