Critical Survey: Medallion Financial (MFIN) and HARGREAVES LANS/ADR (HRGLY)

Medallion Financial (NASDAQ:MFIN) and HARGREAVES LANS/ADR (OTCMKTS:HRGLY) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, profitability, institutional ownership, earnings, risk, dividends and analyst recommendations.

Institutional and Insider Ownership

17.0% of Medallion Financial shares are held by institutional investors. 16.7% of Medallion Financial shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and price targets for Medallion Financial and HARGREAVES LANS/ADR, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Medallion Financial 0 1 2 0 2.67
HARGREAVES LANS/ADR 1 0 0 0 1.00

Medallion Financial presently has a consensus price target of $8.33, suggesting a potential upside of 81.55%. Given Medallion Financial’s stronger consensus rating and higher probable upside, equities analysts plainly believe Medallion Financial is more favorable than HARGREAVES LANS/ADR.

Profitability

This table compares Medallion Financial and HARGREAVES LANS/ADR’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Medallion Financial -34.18% -9.06% -2.34%
HARGREAVES LANS/ADR N/A N/A N/A

Earnings & Valuation

This table compares Medallion Financial and HARGREAVES LANS/ADR’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Medallion Financial $19.71 million 5.69 -$7.12 million $0.31 14.81
HARGREAVES LANS/ADR $602.86 million 18.76 $318.29 million $1.34 35.59

HARGREAVES LANS/ADR has higher revenue and earnings than Medallion Financial. Medallion Financial is trading at a lower price-to-earnings ratio than HARGREAVES LANS/ADR, indicating that it is currently the more affordable of the two stocks.

Dividends

HARGREAVES LANS/ADR pays an annual dividend of $1.06 per share and has a dividend yield of 2.2%. Medallion Financial does not pay a dividend. HARGREAVES LANS/ADR pays out 79.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Volatility & Risk

Medallion Financial has a beta of 1.64, meaning that its stock price is 64% more volatile than the S&P 500. Comparatively, HARGREAVES LANS/ADR has a beta of 1.52, meaning that its stock price is 52% more volatile than the S&P 500.

Summary

HARGREAVES LANS/ADR beats Medallion Financial on 9 of the 16 factors compared between the two stocks.

About Medallion Financial

Medallion Financial Corp., through with its subsidiaries, operates as a specialty finance company in the United States. It originates, acquires, and services loans that finance taxicab medallions and various types of commercial businesses. The company offers consumer loans for the purchase of recreational vehicles, boats, motorcycles, and trailers, as well as to finance small scale home improvements; and commercial loans for the purchase of equipment and related assets necessary to open a new business, or purchase or improvement of an existing business. It also provides secured mezzanine loans to businesses in various industries, including manufacturing, and various service providers; and asset based loans. In addition, the company offers other secured commercial loans to various businesses comprising retail trade and various service providers; and other debt, mezzanine, and equity investment capital to companies in various industries. Further, it raises deposits and conducts other banking activities. Medallion Financial Corp. was founded in 1995 and is headquartered in New York City, New York.

About HARGREAVES LANS/ADR

Hargreaves Lansdown plc provides direct-to-investor investment services for individuals and corporates in the United Kingdom and Poland. Its flagship service is Vantage, a direct-to-investor platform. The company offers stocks and shares individual savings accounts (ISAs), fund and share accounts, self-invested personal pensions (SIPPs), and lifetime ISAs. It also provides pension services, including SIPPs, annuities, drawdown, and mix and match pensions; share dealing services, such as overseas share dealing, initial public offerings and share offers, certificated share dealing, and exchange traded funds and exchange traded commodities/currencies; and fund dealing services. In addition, the company offers personal and business currency services; Junior ISA, SIPP, and investment accounts; and financial advisory services comprising investment management, lump sum investment, pension consolidation, portfolio restructuring, retirement planning, and estate planning services. Hargreaves Lansdown plc was founded in 1981 and is headquartered in Bristol, the United Kingdom.

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