WhiteHorse Finance (NASDAQ:WHF – Get Free Report) and Medallion Financial (NASDAQ:MFIN – Get Free Report) are both small-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their institutional ownership, valuation, risk, analyst recommendations, profitability, dividends and earnings.
Analyst Ratings
This is a summary of current recommendations and price targets for WhiteHorse Finance and Medallion Financial, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| WhiteHorse Finance | 2 | 3 | 0 | 0 | 1.60 |
| Medallion Financial | 1 | 2 | 1 | 0 | 2.00 |
WhiteHorse Finance currently has a consensus target price of $7.75, suggesting a potential upside of 15.67%. Medallion Financial has a consensus target price of $11.25, suggesting a potential upside of 10.19%. Given WhiteHorse Finance’s higher possible upside, research analysts plainly believe WhiteHorse Finance is more favorable than Medallion Financial.
Dividends
Valuation and Earnings
This table compares WhiteHorse Finance and Medallion Financial”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| WhiteHorse Finance | $72.67 million | 1.98 | $14.34 million | $0.41 | 16.34 |
| Medallion Financial | $353.31 million | 0.67 | $43.04 million | $1.48 | 6.90 |
Medallion Financial has higher revenue and earnings than WhiteHorse Finance. Medallion Financial is trading at a lower price-to-earnings ratio than WhiteHorse Finance, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
WhiteHorse Finance has a beta of 0.37, indicating that its stock price is 63% less volatile than the S&P 500. Comparatively, Medallion Financial has a beta of 0.78, indicating that its stock price is 22% less volatile than the S&P 500.
Profitability
This table compares WhiteHorse Finance and Medallion Financial’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| WhiteHorse Finance | 13.46% | 9.47% | 3.95% |
| Medallion Financial | 10.35% | 7.73% | 1.35% |
Insider & Institutional Ownership
13.2% of WhiteHorse Finance shares are held by institutional investors. Comparatively, 40.6% of Medallion Financial shares are held by institutional investors. 3.8% of WhiteHorse Finance shares are held by company insiders. Comparatively, 24.6% of Medallion Financial shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Summary
Medallion Financial beats WhiteHorse Finance on 9 of the 17 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 Medallion Financial
Medallion Financial Corp., together with its subsidiaries, operates as a specialty finance company in the United States. It operates in four segments: Recreation Lending, Home Improvement Lending, Commercial Lending, and Taxi Medallion Lending. The company offers loans that finance consumer purchases of recreational vehicles, boats, and other consumer recreational equipment; consumer financing for window, siding, and roof replacement, swimming pool installations, and other home improvement projects; senior and subordinated loans for the purchase of equipment and related assets necessary to open a new business, or purchase or improvement of an existing business; and taxi medallion loans to individuals and small to mid-size businesses. It also provides debt, mezzanine, and equity investment capital to companies in various commercial industries; and raises deposits and conducts other banking activities. Medallion Financial Corp. was incorporated in 1995 and is headquartered in New York City, New York.
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