Oppenheimer (NYSE:OPY – Get Free Report) and MidCap Financial Investment (NASDAQ:MFIC – Get Free Report) are both small-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, analyst recommendations, valuation, institutional ownership, earnings, profitability and risk.
Risk & Volatility
Oppenheimer has a beta of 1.1, indicating that its stock price is 10% more volatile than the S&P 500. Comparatively, MidCap Financial Investment has a beta of 0.61, indicating that its stock price is 39% less volatile than the S&P 500.
Valuation and Earnings
This table compares Oppenheimer and MidCap Financial Investment”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Oppenheimer | $1.64 billion | 0.80 | $148.40 million | $8.86 | 13.87 |
| MidCap Financial Investment | $320.88 million | 2.47 | $63.17 million | ($0.36) | -26.72 |
Oppenheimer has higher revenue and earnings than MidCap Financial Investment. MidCap Financial Investment is trading at a lower price-to-earnings ratio than Oppenheimer, indicating that it is currently the more affordable of the two stocks.
Dividends
Oppenheimer pays an annual dividend of $0.80 per share and has a dividend yield of 0.7%. MidCap Financial Investment pays an annual dividend of $1.24 per share and has a dividend yield of 12.9%. Oppenheimer pays out 9.0% of its earnings in the form of a dividend. MidCap Financial Investment pays out -344.4% 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. Oppenheimer has raised its dividend for 1 consecutive years. MidCap Financial Investment is clearly the better dividend stock, given its higher yield and lower payout ratio.
Profitability
This table compares Oppenheimer and MidCap Financial Investment’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Oppenheimer | 5.72% | 19.51% | 4.86% |
| MidCap Financial Investment | -9.85% | 11.17% | 4.41% |
Institutional and Insider Ownership
32.3% of Oppenheimer shares are held by institutional investors. Comparatively, 28.4% of MidCap Financial Investment shares are held by institutional investors. 34.9% of Oppenheimer shares are held by insiders. Comparatively, 0.9% of MidCap Financial Investment shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Analyst Ratings
This is a breakdown of current ratings and price targets for Oppenheimer and MidCap Financial Investment, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Oppenheimer | 0 | 0 | 2 | 0 | 3.00 |
| MidCap Financial Investment | 1 | 6 | 2 | 0 | 2.11 |
MidCap Financial Investment has a consensus price target of $11.11, suggesting a potential upside of 15.46%. Given MidCap Financial Investment’s higher possible upside, analysts clearly believe MidCap Financial Investment is more favorable than Oppenheimer.
Summary
Oppenheimer beats MidCap Financial Investment on 12 of the 16 factors compared between the two stocks.
About Oppenheimer
Oppenheimer Holdings Inc. operates as a middle-market investment bank and full-service broker-dealer in the Americas, Europe, the Middle East, and Asia. The company provides brokerage services covering corporate equity and debt securities, money market instruments, exchange-traded options and futures contracts, municipal bonds, mutual funds, exchange-traded funds, and unit investment trusts; financial and wealth planning services; and margin lending services. It offers asset management services, including separately managed accounts, mutual fund managed accounts, discretionary portfolio management programs, non-discretionary investment advisory and consultation services, alternative investments, portfolio enhancement programs, and institutional taxable fixed income portfolio management strategies and solutions, as well as taxable and non-taxable fixed income portfolios and strategies. In addition, the company offers investment banking services, such as strategic advisory services and capital markets products; merger and acquisition, equities capital market, debt capital market, debt advisory and restructuring, and fund placement services; and institutional equity sales and trading, equity research, equity derivatives and index options, convertible bonds, event driven sales and trading, and portfolio and electronic trading. Further, it provides institutional fixed income sales and trading, fixed income research, public finance, and municipal trading services; and proprietary trading and investment activities. Additionally, the company offers underwriting, market-making, trust, and discount services, as well as a cloud-based financial market. It serves high-net-worth individuals and families, corporate executives, public and private businesses, institutions and corporations, governments, financial sponsors, and domestic and international investors. Oppenheimer Holdings Inc. was founded in 1881 and is headquartered in New York, New York.
About MidCap Financial Investment
MidCap Financial Investment Corporation (Former name Apollo Investment Corporation) is business development company and a closed-end, externally managed, non-diversified management investment company. It is elected to be treated as a business development company (BDC) under the Investment Company Act of 1940 (the 1940 Act) specializing in private equity investments in leveraged buyouts, acquisitions, recapitalizations, growth capital, refinancing and private middle market companies. It provides direct equity capital, mezzanine, first lien secured loans, stretch senior loans, unitranche loans, second lien secured loans and senior secured loans, unsecured debt, and subordinated debt and loans. It also seeks to invest in PIPES transactions. The fund may also invest in securities of public companies that are thinly traded and may acquire investments in the secondary market and structured products. It prefers to invest in preferred equity, common equity / interests and warrants and makes equity co-investments. It may invest in cash equivalents, U.S. government securities, high-quality debt investments that mature in one year or less, high-yield bonds, distressed debt, non-U.S. investments, or securities of public companies that are not thinly traded. It also focuses on other investments such as collateralized loan obligations (CLOs) and credit-linked notes (CLNs). The fund typically invests in construction and building materials, business services, plastics & rubber, advertising, capital equipment, education, cable television, chemicals, consumer products/goods durable and non-durable and customer services, direct marketing, energy oil & gas, electricity and utilities. The fund also invest in aerospace & defense, wholesale, telecommunications, financial services, hotel, gaming, leisure, restaurants; environmental industries, healthcare and pharmaceuticals, high tech industries, beverages, food and tobacco, manufacturing, media diversified & production, printing and publishing, retail, automation, aviation and consumer transport, transportation, cargo and distribution. It primarily invests in United States. It primarily invests between $20 million and $250 million in its portfolio companies and EBITDA with less than $75 million. The fund seeks to make investments with stated maturities of five to 10 years.
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