ONEX (OTCMKTS:ONEXF – Get Free Report) and Sound Point Meridian Capital (NYSE:SPMC – Get Free Report) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their risk, dividends, profitability, valuation, institutional ownership, analyst recommendations and earnings.
Analyst Recommendations
This is a breakdown of current ratings for ONEX and Sound Point Meridian Capital, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| ONEX | 0 | 1 | 2 | 0 | 2.67 |
| Sound Point Meridian Capital | 1 | 2 | 1 | 0 | 2.00 |
Sound Point Meridian Capital has a consensus target price of $16.10, suggesting a potential upside of 36.45%. Given Sound Point Meridian Capital’s higher probable upside, analysts clearly believe Sound Point Meridian Capital is more favorable than ONEX.
Profitability
| Net Margins | Return on Equity | Return on Assets | |
| ONEX | 66.06% | 6.68% | 4.50% |
| Sound Point Meridian Capital | N/A | N/A | N/A |
Risk & Volatility
ONEX has a beta of 1.18, indicating that its share price is 18% more volatile than the S&P 500. Comparatively, Sound Point Meridian Capital has a beta of 1.15, indicating that its share price is 15% more volatile than the S&P 500.
Valuation and Earnings
This table compares ONEX and Sound Point Meridian Capital”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| ONEX | $899.00 million | 6.57 | $617.00 million | $8.27 | 9.36 |
| Sound Point Meridian Capital | $72.51 million | 3.34 | -$125.87 million | ($6.14) | -1.92 |
ONEX has higher revenue and earnings than Sound Point Meridian Capital. Sound Point Meridian Capital is trading at a lower price-to-earnings ratio than ONEX, indicating that it is currently the more affordable of the two stocks.
Dividends
ONEX pays an annual dividend of $0.29 per share and has a dividend yield of 0.4%. Sound Point Meridian Capital pays an annual dividend of $2.40 per share and has a dividend yield of 20.3%. ONEX pays out 3.5% of its earnings in the form of a dividend. Sound Point Meridian Capital pays out -39.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Sound Point Meridian Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.
Institutional and Insider Ownership
0.7% of ONEX shares are held by institutional investors. 0.9% of Sound Point Meridian Capital shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Summary
ONEX beats Sound Point Meridian Capital on 12 of the 16 factors compared between the two stocks.
About ONEX
Onex Corporation is a private equity firm specializing in acquisitions and platform acquisitions. The firm makes investments in buyouts, large- middle market, large-cap, mid-cap, and small-cap market and distressed companies. It also invests in recapitalization, growth capital, corporate carve-outs of subsidiaries and mission-critical supply divisions from multinational corporations, operational restructurings of undervalued businesses, and builds up. The firm seeks to invest in technology, electronics manufacturing services, industrial, aerospace, healthcare, retail, restaurants, industrials products, customer care services, metal services, building products, entertainment, gaming, cabinetry products, commercial vehicles, commercial and investment banking, financial services, commercial and multi-unit residential real estate. It invests in global businesses headquartered in North America, including United States and Canada, or Europe. The firm seeks to invest between $125 million and $1 billion in companies that have minimum revenues of $300 million. It does not consider size if the company is in an industry in which the firm already has presence. The firm seeks to make direct as well as co-investments through managed private equity, real estate and credit funds. It seeks to acquire a control position in its portfolio companies. Onex Corporation was founded in 1984 and is based in Toronto, Canada with additional offices in New York, New York; Englewood Cliffs, New Jersey; Boston, Massachusetts and London, United Kingdom.
About Sound Point Meridian Capital
Sound Point Meridian Capital Inc. is an externally managed, non-diversified closed-end management investment company. Its investment objective is to generate high current income, with a secondary objective to generate capital appreciation, by investing primarily in third-party collateralized loan obligation equity and mezzanine tranches. Sound Point Meridian Capital Inc. is based in NEW YORK.
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