PennantPark Investment (NASDAQ:PNNT) and Triplepoint Venture Growth BDC (NYSE:TPVG) are both small-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their dividends, institutional ownership, earnings, analyst recommendations, risk, profitability and valuation.
This is a breakdown of current ratings and target prices for PennantPark Investment and Triplepoint Venture Growth BDC, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Triplepoint Venture Growth BDC||0||2||2||0||2.50|
PennantPark Investment presently has a consensus price target of $8.00, suggesting a potential upside of 6.67%. Triplepoint Venture Growth BDC has a consensus price target of $14.08, suggesting a potential upside of 5.49%. Given PennantPark Investment’s higher possible upside, equities research analysts clearly believe PennantPark Investment is more favorable than Triplepoint Venture Growth BDC.
Valuation & Earnings
This table compares PennantPark Investment and Triplepoint Venture Growth BDC’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|PennantPark Investment||$124.53 million||4.22||$61.71 million||$0.79||9.49|
|Triplepoint Venture Growth BDC||$51.51 million||4.61||$19.22 million||$1.61||8.29|
PennantPark Investment has higher revenue and earnings than Triplepoint Venture Growth BDC. Triplepoint Venture Growth BDC is trading at a lower price-to-earnings ratio than PennantPark Investment, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
PennantPark Investment has a beta of 1.19, meaning that its stock price is 19% more volatile than the S&P 500. Comparatively, Triplepoint Venture Growth BDC has a beta of 1.22, meaning that its stock price is 22% more volatile than the S&P 500.
PennantPark Investment pays an annual dividend of $0.72 per share and has a dividend yield of 9.6%. Triplepoint Venture Growth BDC pays an annual dividend of $1.44 per share and has a dividend yield of 10.8%. PennantPark Investment pays out 91.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Triplepoint Venture Growth BDC pays out 89.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Triplepoint Venture Growth BDC is clearly the better dividend stock, given its higher yield and lower payout ratio.
Institutional & Insider Ownership
42.6% of PennantPark Investment shares are owned by institutional investors. Comparatively, 38.3% of Triplepoint Venture Growth BDC shares are owned by institutional investors. 2.0% of PennantPark Investment shares are owned by insiders. Comparatively, 1.8% of Triplepoint Venture Growth BDC shares are owned by 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.
This table compares PennantPark Investment and Triplepoint Venture Growth BDC’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Triplepoint Venture Growth BDC||47.08%||10.49%||4.90%|
Triplepoint Venture Growth BDC beats PennantPark Investment on 10 of the 16 factors compared between the two stocks.
PennantPark Investment Company Profile
PennantPark Investment Corporation is a closed-end, non-diversified investment company. The Company is a business development company. Its objectives are to generate both current income and capital appreciation while seeking to preserve capital through debt and equity investments primarily made to the United States middle-market companies in the form of senior secured debt, mezzanine debt and equity investments. The Company’s debt investments may generally range in maturity from 3 to 10 years and, are made to the United States and to a limited extent, non-United States corporations, partnerships and other business entities, which operate in various industries and geographical regions. In addition, it may invest up to approximately 30% of its portfolio in non-qualifying assets. It invests in sectors, such as aerospace and defense; energy/utilities; auto sector; environmental services, and beverage, among others. PennantPark Investment Advisers, LLC is the Company’s investment advisor.
Triplepoint Venture Growth BDC Company Profile
TriplePoint Venture Growth BDC Corp. is a closed-end, non-diversified management investment company. The Company’s investment objective is to maximize its total return to stockholders primarily in the form of current income and, to a lesser extent, capital appreciation by primarily lending with warrants to venture growth stage companies focused in technology, life sciences and other high growth industries, which are backed by TriplePoint Capital LLC’s (TPC) select group of venture capital investors. The Company targets investment opportunities in venture growth stage companies backed by venture capital investors. The Company originates and invests primarily in loans that have a secured collateral position and are used by venture growth stage companies to finance their continued expansion and growth, equipment financings and, on a select basis, revolving loans. The Company is managed by TPVG Advisers LLC.
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