Trinity Capital (NASDAQ:TRIN – Get Free Report) and Sound Point Meridian Capital (NYSE:SPMC – Get Free Report) are both small-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, valuation, analyst recommendations, risk, profitability, institutional ownership and earnings.
Earnings and Valuation
This table compares Trinity Capital and Sound Point Meridian Capital”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Trinity Capital | $216.31 million | 7.35 | $135.60 million | $1.75 | 9.59 |
| Sound Point Meridian Capital | -$121.96 million | -0.96 | -$118.47 million | ($5.78) | -0.99 |
Trinity Capital has higher revenue and earnings than Sound Point Meridian Capital. Sound Point Meridian Capital is trading at a lower price-to-earnings ratio than Trinity Capital, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
Trinity Capital has a beta of 0.63, suggesting that its stock price is 37% less volatile than the S&P 500. Comparatively, Sound Point Meridian Capital has a beta of 1.2, suggesting that its stock price is 20% more volatile than the S&P 500.
Profitability
This table compares Trinity Capital and Sound Point Meridian Capital’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Trinity Capital | 43.45% | 14.94% | 6.69% |
| Sound Point Meridian Capital | N/A | N/A | N/A |
Analyst Ratings
This is a summary of recent recommendations and price targets for Trinity Capital and Sound Point Meridian Capital, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Trinity Capital | 1 | 1 | 3 | 1 | 2.67 |
| Sound Point Meridian Capital | 0 | 3 | 1 | 0 | 2.25 |
Trinity Capital currently has a consensus price target of $16.60, indicating a potential downside of 1.10%. Sound Point Meridian Capital has a consensus price target of $15.12, indicating a potential upside of 164.89%. Given Sound Point Meridian Capital’s higher possible upside, analysts clearly believe Sound Point Meridian Capital is more favorable than Trinity Capital.
Dividends
Trinity Capital pays an annual dividend of $2.04 per share and has a dividend yield of 12.2%. Sound Point Meridian Capital pays an annual dividend of $1.56 per share and has a dividend yield of 27.3%. Trinity Capital pays out 116.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Sound Point Meridian Capital pays out -27.0% of its earnings in the form of a dividend. Trinity Capital has raised its dividend for 1 consecutive years. Sound Point Meridian Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.
Insider and Institutional Ownership
24.6% of Trinity Capital shares are owned by institutional investors. 4.3% of Trinity Capital shares are owned by company insiders. Comparatively, 0.9% of Sound Point Meridian Capital shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Summary
Trinity Capital beats Sound Point Meridian Capital on 14 of the 18 factors compared between the two stocks.
About Trinity Capital
Trinity Capital Inc. is a business development company. It is a venture capital firm specializing in venture debt to growth stage companies looking for loans and/or equipment financing. Trinity Capital Inc. was founded in 2019 is based in Phoenix, Arizona with additional offices in the United States.
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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