PhenixFIN (NYSE:PFX – Get Free Report) and Fidus Investment (NASDAQ:FDUS – Get Free Report) are both small-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their risk, profitability, earnings, analyst recommendations, institutional ownership, dividends and valuation.
Insider & Institutional Ownership
43.3% of PhenixFIN shares are owned by institutional investors. Comparatively, 28.1% of Fidus Investment shares are owned by institutional investors. 25.2% of PhenixFIN shares are owned by company insiders. Comparatively, 0.9% of Fidus Investment shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Volatility and Risk
PhenixFIN has a beta of 0.28, indicating that its share price is 72% less volatile than the S&P 500. Comparatively, Fidus Investment has a beta of 0.67, indicating that its share price is 33% less volatile than the S&P 500.
Analyst Recommendations
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| PhenixFIN | 0 | 0 | 0 | 1 | 4.00 |
| Fidus Investment | 0 | 2 | 0 | 0 | 2.00 |
Fidus Investment has a consensus price target of $19.50, indicating a potential upside of 0.72%. Given Fidus Investment’s higher probable upside, analysts clearly believe Fidus Investment is more favorable than PhenixFIN.
Dividends
PhenixFIN pays an annual dividend of $0.48 per share and has a dividend yield of 1.0%. Fidus Investment pays an annual dividend of $1.72 per share and has a dividend yield of 8.9%. PhenixFIN pays out 19.9% of its earnings in the form of a dividend. Fidus Investment pays out 82.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Profitability
This table compares PhenixFIN and Fidus Investment’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| PhenixFIN | 72.98% | 2.95% | 1.68% |
| Fidus Investment | 45.36% | 10.87% | 5.64% |
Earnings & Valuation
This table compares PhenixFIN and Fidus Investment”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| PhenixFIN | $14.16 million | 6.28 | $18.62 million | $2.41 | 19.09 |
| Fidus Investment | $155.87 million | 4.71 | $82.40 million | $2.09 | 9.26 |
Fidus Investment has higher revenue and earnings than PhenixFIN. Fidus Investment is trading at a lower price-to-earnings ratio than PhenixFIN, indicating that it is currently the more affordable of the two stocks.
About PhenixFIN
PhenixFIN Corporation is a business development company. The firm seeks to invest in privately negotiated debt and equity securities of small and middle market companies. It primarily invests in the following sectors: business services; buildings and real estate; automobile; oil and gas; aerospace and defense; home and office furnishings, housewares, and durable consumer products; healthcare, education and childcare; personal, food, and miscellaneous services; retail stores, diversified or conglomerate manufacturing; telecommunications; mining, steel, iron, and non-precious metals; leisure, amusement, motion pictures, and entertainment; chemicals, plastics, and rubber; finance; personal and nondurable consumer products (manufacturing only); beverage, food, and tobacco; containers, packaging, and glass; structure finance securities; machinery (non-agriculture, non-construction, non-electric); diversified or conglomerate service; restaurant and franchise; electronics; and cargo transport. The fund seeks to invest in companies located in North America. The fund targets private debt transactions in companies with enterprise values or asset values between $25 million and $250 million. The fund seeks to invest in companies with debt investment values between $10 million and $50 million. It exits its investments between three years and seven years; it holds most of its investments to maturity or repayment, but may realize or sell some investments earlier. The fund may take a board seat on its investee companies and can also offer managerial assistance to certain portfolio companies. It structures its investments as first lien senior secured loans, second lien senior secured loans, senior secured notes, senior subordinated notes, subordinate notes, unitranche loans, and seeks warrants or other equity participation. The fund may co-invest in privately negotiated transactions under certain conditions. PhenixFIN Corporation was founded in 2010 and is headquartered in New York, New York.
About Fidus Investment
Fidus Investment Corporation is a business development company. It specializing in leveraged buyouts, refinancings, change of ownership transactions, recapitalizations, strategic acquisitions, mezzanine, growth capital, business expansion, lower middle market investments, debt investments, subordinated and second lien loans, senior secured and unitranche debt, preferred equity, warrants, subordinated debt, senior subordinated notes, junior secured loans, and unitranche loans. It does not invest in turnarounds or distressed situations. The fund prefers to invest in aerospace and defense, business services, consumer products and services including retail, food, and beverage, healthcare products and services, industrial products and services, information technology services, niche manufacturing, transportation and logistics, and value-added distribution sectors. It seeks to invest in companies based in United States. The fund typically invests between $5 million and $15 million per transaction in companies with annual revenues between $10 million and $150 million and an annual EBITDA between $3 million and $20 million, but it can occasionally invest in larger or smaller companies. It seeks to acquire minority equity stakes and board observation rights in conjunction with its investments.
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