OFS Capital (NASDAQ:OFS) and Mentor Capital (OTCMKTS:MNTR) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, risk, earnings, valuation, analyst recommendations, dividends and institutional ownership.
OFS Capital pays an annual dividend of $1.36 per share and has a dividend yield of 11.5%. Mentor Capital does not pay a dividend. OFS Capital pays out 98.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Earnings and Valuation
This table compares OFS Capital and Mentor Capital’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|OFS Capital||$42.83 million||3.70||$9.57 million||$1.38||8.59|
|Mentor Capital||$5.28 million||2.09||-$410,000.00||N/A||N/A|
OFS Capital has higher revenue and earnings than Mentor Capital.
This is a summary of current recommendations and price targets for OFS Capital and Mentor Capital, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
OFS Capital currently has a consensus target price of $15.00, suggesting a potential upside of 26.58%. Given OFS Capital’s higher possible upside, equities analysts plainly believe OFS Capital is more favorable than Mentor Capital.
Risk and Volatility
OFS Capital has a beta of 0.69, suggesting that its share price is 31% less volatile than the S&P 500. Comparatively, Mentor Capital has a beta of 3.05, suggesting that its share price is 205% more volatile than the S&P 500.
Insider & Institutional Ownership
22.4% of OFS Capital shares are held by institutional investors. Comparatively, 0.0% of Mentor Capital shares are held by institutional investors. 0.0% of OFS Capital shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
This table compares OFS Capital and Mentor Capital’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
OFS Capital beats Mentor Capital on 11 of the 13 factors compared between the two stocks.
About OFS Capital
OFS Capital Corporation is a business development company specializing in direct and fund investments as well as add-on acquisitions. It does not invest in operational turnarounds or start-up businesses. For direct, it specializes in debt and structured equity investments, recapitalizations and refinancing, management and leveraged buyouts, acquisition financings, shareholder liquidity events, growth capital, independent sponsor transactions, ESOPs, and minority investments in the lower middle market companies. It invests in the aerospace and defense, business services, consumer products and services, food and beverage, health care services, specialty chemicals, transportation and logistics, distribution, franchising, and industrial and niche manufacturing sectors. The fund invests in companies based in United States. It seeks to invest between $3 million and $20 million in companies with revenues between $10 million and $200 million, Annual EBITDA between $3 million and $30 million, and Enterprise value between $10 million and $500 million. The fund seeks to invest in companies with debt values between $5 million and $25 million. The fund uses senior secured, unitranche loans, first-lien, second-lien, mezzanine loans, warrants, and preferred equity securities and common equity securities. It prefers to take a minority stake in the investments made. It also co-invests with its partners for additional capital.
About Mentor Capital
Mentor Capital, Inc. is a private equity firm specializing in acquisitions and emerging growth investments. The firm provides passive equity funding and liquidity to smaller companies and owners in the medical, marijuana and social use cannabis companies. It invests in shelf IPO's and public and private companies and seeks to provide public market access to owners of small private companies. The firm specializes in pre-IPO investments in Cannabis companies. In case of shelf IPO's, the firm prefers to invest in companies with sales greater than $40 million. It prefers to take significant position in its portfolio companies. The firm invests only in companies that have earnings. Mentor Capital, Inc. was founded in 1985 and is based in Ramona, California.
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