Robinhood Markets (NASDAQ:HOOD – Get Free Report) and PennantPark Investment (NASDAQ:PNNT – Get Free Report) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their institutional ownership, risk, valuation, analyst recommendations, dividends, earnings and profitability.
Valuation & Earnings
This table compares Robinhood Markets and PennantPark Investment”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Robinhood Markets | $4.93 billion | 20.84 | $1.88 billion | $2.27 | 50.37 |
| PennantPark Investment | $21.50 million | 10.92 | $48.85 million | $0.16 | 22.47 |
Institutional and Insider Ownership
93.3% of Robinhood Markets shares are held by institutional investors. Comparatively, 26.6% of PennantPark Investment shares are held by institutional investors. 13.5% of Robinhood Markets shares are held by insiders. Comparatively, 3.0% of PennantPark 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 summary of current ratings and recommmendations for Robinhood Markets and PennantPark Investment, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Robinhood Markets | 0 | 3 | 23 | 2 | 2.96 |
| PennantPark Investment | 1 | 3 | 1 | 0 | 2.00 |
Robinhood Markets currently has a consensus price target of $130.88, indicating a potential upside of 14.47%. PennantPark Investment has a consensus price target of $5.10, indicating a potential upside of 41.86%. Given PennantPark Investment’s higher possible upside, analysts plainly believe PennantPark Investment is more favorable than Robinhood Markets.
Volatility & Risk
Robinhood Markets has a beta of 2.34, suggesting that its stock price is 134% more volatile than the S&P 500. Comparatively, PennantPark Investment has a beta of 0.61, suggesting that its stock price is 39% less volatile than the S&P 500.
Profitability
This table compares Robinhood Markets and PennantPark Investment’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Robinhood Markets | 42.01% | 22.43% | 4.56% |
| PennantPark Investment | 11.33% | 11.59% | 4.23% |
Summary
Robinhood Markets beats PennantPark Investment on 14 of the 15 factors compared between the two stocks.
About Robinhood Markets
Robinhood Markets, Inc. operates financial services platform in the United States. Its platform allows users to invest in stocks, exchange-traded funds (ETFs), American depository receipts, options, gold, and cryptocurrencies. The company offers fractional trading, recurring investments, fully-paid securities lending, access to investing on margin, cash sweep, instant withdrawals, retirement program, around-the-clock trading, and initial public offerings participation services. It also provides various learning and education solutions comprise Snacks, an accessible digest of business news stories for a new generation of investors.; Learn, which is an online collection of beginners' guides, feature tutorials, and financial dictionary; Newsfeeds that offer access to free, premium news from sites from various sites, such as Barron's, Reuters, and Dow Jones. In addition, the company offers In-App Education, a resource that covers investing fundamentals, including why people invest, a stock market overview, and tips on how to define investing goals, as well as allows customers to understand the basics of investing before their first trade; and Crypto Learn and Earn, an educational module available to various crypto customers through Robinhood Learn to teach customers the basics related to cryptocurrency. Further, it provides Robinhood credit cards, cash card and spending accounts, and wallets. Robinhood Markets, Inc. was incorporated in 2013 and is headquartered in Menlo Park, California.
About PennantPark Investment
PennantPark Investment Corporation, a business development company is a private equity fund specializes in direct and mezzanine investments in middle market companies. It invests in the form of mezzanine debt, senior secured loans, and equity investments. The fund typically invests in buildings and real estate, hotels, gaming and leisure, technology, telecommunications, transportation, information technology services, electronics, healthcare & pharmaceuticals, education and childcare, financial services, printing and publishing, consumer products, business services, energy & Related Services and utilities, distribution, oil and gas, media, environmental services, aerospace and defense, building materials, capital equipment, chemicals, plastics, & rubber, food & beverage, wholesale, manufacturing and basic industries and retail. It invests in equity securities and debt transactions through preferred stock, common stock, warrants, options, senior secured debt, subordinated debt, subordinated loans, first lien debt, mezzanine loans, and distressed debt securities and private equity co-investments. It seeks to invest in companies based in the United States. The fund seeks to invest between $10 million and $100 million cross the capital structure (senior secured loans, subordinated debt, and other investments) in its portfolio companies with EBITDA between $10 to $50 million. Its mezzanine loans, senior secured loans, and other investments in its portfolio companies are between $15 million and $50 million. The fund may also make non-control equity and debt investments.
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