WhiteHorse Finance (NASDAQ:WHF) & TriplePoint Venture Growth BDC (NYSE:TPVG) Critical Survey

TriplePoint Venture Growth BDC (NYSE:TPVG) and WhiteHorse Finance (NASDAQ:WHF) are both small-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, institutional ownership, analyst recommendations, profitability, earnings, dividends and risk.

Institutional & Insider Ownership

12.8% of TriplePoint Venture Growth BDC shares are held by institutional investors. Comparatively, 13.2% of WhiteHorse Finance shares are held by institutional investors. 1.5% of TriplePoint Venture Growth BDC shares are held by company insiders. Comparatively, 2.5% of WhiteHorse Finance shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Risk & Volatility

TriplePoint Venture Growth BDC has a beta of 1.36, meaning that its share price is 36% more volatile than the S&P 500. Comparatively, WhiteHorse Finance has a beta of 0.56, meaning that its share price is 44% less volatile than the S&P 500.

Dividends

TriplePoint Venture Growth BDC pays an annual dividend of $0.92 per share and has a dividend yield of 17.8%. WhiteHorse Finance pays an annual dividend of $1.00 per share and has a dividend yield of 15.9%. TriplePoint Venture Growth BDC pays out 108.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. WhiteHorse Finance pays out 232.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. WhiteHorse Finance has increased its dividend for 3 consecutive years. TriplePoint Venture Growth BDC is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of current ratings and price targets for TriplePoint Venture Growth BDC and WhiteHorse Finance, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TriplePoint Venture Growth BDC	1	6	0	0	1.86
WhiteHorse Finance	2	3	0	0	1.60

TriplePoint Venture Growth BDC currently has a consensus price target of $6.25, indicating a potential upside of 20.68%. WhiteHorse Finance has a consensus price target of $7.75, indicating a potential upside of 23.02%. Given WhiteHorse Finance’s higher probable upside, analysts plainly believe WhiteHorse Finance is more favorable than TriplePoint Venture Growth BDC.

Valuation and Earnings

This table compares TriplePoint Venture Growth BDC and WhiteHorse Finance”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TriplePoint Venture Growth BDC	$108.65 million	1.93	$32.05 million	$0.85	6.09
WhiteHorse Finance	$92.82 million	1.58	$10.85 million	$0.43	14.65

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

Profitability

This table compares TriplePoint Venture Growth BDC and WhiteHorse Finance’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TriplePoint Venture Growth BDC	36.02%	12.88%	5.76%
WhiteHorse Finance	12.91%	9.93%	4.14%

Summary

TriplePoint Venture Growth BDC beats WhiteHorse Finance on 11 of the 16 factors compared between the two stocks.

About TriplePoint Venture Growth BDC

TriplePoint Venture Growth BDC Corp. is a business development company specializing investments in venture capital-backed companies at the growth stage investments. It also provides debt financing to venture growth space companies which includes growth capital loans, secured and customized loans, equipment financings, revolving loans and direct equity investments. The fund seeks to invest in e-commerce, entertainment, technology and life sciences sector. Within technology the areas of focus include: Security, wireless communication equipments, network system and software, business applications software, conferencing equipments/services .big data, cloud computing, data storage, electronics, energy efficiency, hardware, information services, internet and media, networking, semiconductors, software, software as a service, and other technology related subsectors and within life sciences the areas of focus include: biotechnology, bio fuels/bio mass, diagnostic testing and bioinformatics, drug delivery, drug discovery, healthcare information systems, healthcare services, medical, surgical and therapeutic devices, pharmaceuticals and other life science related subsectors. Within growth capital loans it invests between $5 million and $50 million, for equipment financings it invests between $5 million and $25 million, for revolving loans it invests between $1 million and $25 million, and for direct equity investments it may invest between $0.1 million and $5 million (generally not exceeding 5% of the company’s total equity). The debt financing products are typically structured as lines of credit and it invests through warrants and secured loans. It targeted returns between 10% and 18%. It does not take board seat in the company.

About WhiteHorse Finance

WhiteHorse Finance, Inc. is business development company, non-diversified, closed end management company specializing in originating senior secured loans, lower middle market, growth capital industries. It invests in broadline retail, office services and supplies, building products, health care services, health care supplies, research and consulting services, application software, home furnishings, specialized consumer services, data processing and outsourced services, leisure facilities, cable, and satellite. It prefers to invest in United States. It typically invests between $5 million to $25 million in companies having enterprise value of between $50 million and $350 million.