Royce Value Trust (NYSE:RVT) and Horizon Technology Finance (NYSE:HRZN) Critical Analysis

Royce Value Trust (NYSE:RVT) and Horizon Technology Finance (NASDAQ:HRZN) are both small-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their analyst recommendations, risk, valuation, dividends, profitability, earnings and institutional ownership.

Risk & Volatility

Royce Value Trust has a beta of 1.36, meaning that its stock price is 36% more volatile than the S&P 500. Comparatively, Horizon Technology Finance has a beta of 0.67, meaning that its stock price is 33% less volatile than the S&P 500.

Dividends

Royce Value Trust pays an annual dividend of $1.21 per share and has a dividend yield of 8.4%. Horizon Technology Finance pays an annual dividend of $1.20 per share and has a dividend yield of 9.7%. Horizon Technology Finance pays out 100.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Royce Value Trust and Horizon Technology Finance, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Royce Value Trust 0 0 0 0 N/A
Horizon Technology Finance 0 2 1 0 2.33

Horizon Technology Finance has a consensus target price of $12.00, indicating a potential downside of 3.23%. Given Horizon Technology Finance’s higher possible upside, analysts clearly believe Horizon Technology Finance is more favorable than Royce Value Trust.

Profitability

This table compares Royce Value Trust and Horizon Technology Finance’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Royce Value Trust N/A N/A N/A
Horizon Technology Finance 41.04% 11.68% 6.12%

Insider & Institutional Ownership

21.2% of Royce Value Trust shares are held by institutional investors. Comparatively, 10.5% of Horizon Technology Finance shares are held by institutional investors. 0.5% of Royce Value Trust shares are held by company insiders. Comparatively, 1.5% of Horizon Technology Finance shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Royce Value Trust and Horizon Technology Finance’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Royce Value Trust N/A N/A N/A N/A N/A
Horizon Technology Finance $31.09 million 5.81 $13.01 million $1.20 10.33

Horizon Technology Finance has higher revenue and earnings than Royce Value Trust.

Summary

Horizon Technology Finance beats Royce Value Trust on 8 of the 11 factors compared between the two stocks.

Royce Value Trust Company Profile

Royce Value Trust Inc. is a close ended equity mutual fund launched and managed by Royce & Associates, LLC. It invests in the public equity markets of the United States. The fund spreads its investments across diversified sectors. It invests in value oriented stocks of small cap and micro cap companies. The fund benchmarks the performance of its portfolio against the Russell 2000 Index. Royce Value Trust Inc. was formed on July 1, 1986 and is domiciled in the United States.

Horizon Technology Finance Company Profile

Horizon Technology Finance Corporation is a business development company specializing in lending and and investing in development-stage investments. It focuses on making secured debt and venture lending investments to venture capital backed companies in the technology, life science, healthcare information and services, and cleantech industries. It seeks to invest in companies in the United States.

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