WhiteHorse Finance (NASDAQ:WHF – Get Free Report) and Chicago Atlantic BDC (NASDAQ:LIEN – Get Free Report) are both small-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, profitability, analyst recommendations, earnings and risk.
Risk and Volatility
WhiteHorse Finance has a beta of 0.56, meaning that its stock price is 44% less volatile than the S&P 500. Comparatively, Chicago Atlantic BDC has a beta of 0.26, meaning that its stock price is 74% less volatile than the S&P 500.
Analyst Ratings
This is a summary of recent ratings and recommmendations for WhiteHorse Finance and Chicago Atlantic BDC, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| WhiteHorse Finance | 2 | 3 | 0 | 0 | 1.60 |
| Chicago Atlantic BDC | 0 | 3 | 0 | 0 | 2.00 |
Valuation & Earnings
This table compares WhiteHorse Finance and Chicago Atlantic BDC”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| WhiteHorse Finance | $92.82 million | 1.73 | $10.85 million | $0.43 | 16.09 |
| Chicago Atlantic BDC | $21.67 million | 11.27 | $9.62 million | $0.79 | 13.54 |
WhiteHorse Finance has higher revenue and earnings than Chicago Atlantic BDC. Chicago Atlantic 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.
Dividends
WhiteHorse Finance pays an annual dividend of $1.00 per share and has a dividend yield of 14.5%. Chicago Atlantic BDC pays an annual dividend of $1.36 per share and has a dividend yield of 12.7%. 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. Chicago Atlantic BDC pays out 172.2% 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 has increased its dividend for 3 consecutive years. WhiteHorse Finance is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Institutional and Insider Ownership
13.2% of WhiteHorse Finance shares are owned by institutional investors. Comparatively, 4.4% of Chicago Atlantic BDC shares are owned by institutional investors. 2.5% of WhiteHorse Finance shares are owned by company insiders. Comparatively, 16.9% of Chicago Atlantic BDC shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Profitability
This table compares WhiteHorse Finance and Chicago Atlantic BDC’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| WhiteHorse Finance | 12.91% | 9.93% | 4.14% |
| Chicago Atlantic BDC | 33.72% | 5.80% | 5.46% |
Summary
WhiteHorse Finance beats Chicago Atlantic BDC on 9 of the 16 factors compared between the two stocks.
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.
About Chicago Atlantic BDC
Chicago Atlantic BDC Inc. is a specialty finance company which has elected to be regulated as a business development company. Its investment objective is to maximize risk-adjusted returns on equity for its stockholders by investing primarily in direct loans to privately held middle-market companies, with a primary focus on cannabis companies. Chicago Atlantic BDC Inc., formerly known as CHICAGO ATLNTIC, is based in NEW YORK.
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