Waton Financial (NASDAQ:WTF) vs. CION Investment (NYSE:CION) Financial Analysis

Waton Financial (NASDAQ:WTF) and CION Investment (NYSE:CION) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, risk, earnings, profitability, valuation and dividends.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Waton Financial and CION Investment, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Waton Financial	1	0	0	0	1.00
CION Investment	2	1	0	0	1.33

CION Investment has a consensus price target of $6.50, suggesting a potential downside of 12.99%. Given CION Investment’s stronger consensus rating and higher probable upside, analysts clearly believe CION Investment is more favorable than Waton Financial.

Earnings & Valuation

This table compares Waton Financial and CION Investment”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Waton Financial	$11.08 million	12.21	-$15.15 million	N/A	N/A
CION Investment	$240.82 million	1.53	-$20.63 million	$0.06	124.50

Waton Financial has higher earnings, but lower revenue than CION Investment.

Risk and Volatility

Waton Financial has a beta of 1.2, meaning that its share price is 20% more volatile than the S&P 500. Comparatively, CION Investment has a beta of 1.11, meaning that its share price is 11% more volatile than the S&P 500.

Profitability

This table compares Waton Financial and CION Investment’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Waton Financial	N/A	N/A	N/A
CION Investment	1.17%	11.76%	4.51%

Institutional & Insider Ownership

32.0% of CION Investment shares are held by institutional investors. 0.6% of CION Investment shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

CION Investment beats Waton Financial on 8 of the 11 factors compared between the two stocks.

About Waton Financial

Waton Financial Ltd. is a holding company, which engages in the provision of securities brokerage and financial technology services. It is also involved in software licensing and related support services including the licensing of trading platform app, upgrades and enhancements, maintenance, and other related services to financial institutions. The company was founded on June 25, 2010 and is headquartered in Hong Kong.

About CION Investment

CION Investment Corporation is a business development company. It specializes in investments in senior secured loans, including unitranche loans, First Lien, second lien loans, long-term subordinated loans, and mezzanine loans; equity interests such as warrants or options; and corporate bonds; and other debt securities in middle-market companies. The firm invests in growth capital, acquisitions, leveraged buyouts, market/product expansion, refinancing and recapitalization. The fund also invests up to 30 percent of their assets opportunistically in other types of investments, including the securities of larger public companies and foreign securities. It also makes investments in the secondary loan market. The fund does not invest in start-up companies, turnaround situations, or companies with speculative business plans. The fund prefers to invest in high tech industries, healthcare, pharmaceuticals, business services, media, chemicals, plastic, rubber, telecommunication, consumer services, advertising, printing and publishing, consumer goods, durables, diversified financials, and other industries. It also invests in homebuilding, restaurants, beverage and tobacco bars, broadcasting, distributors, Non-durable good distribution, food beverage and tobacco, energy, oil gas and consumables fuels, insurance, aerospace and defense, industrial machinery, paper and forest product machinery, information technology, metals and mining, and real estate. It primarily seeks to invest in the United States. The fund seeks to invest between $5 million and $50 million in companies with an EBITDA between $25 million and $75 million with average targeted hold of $25 million. It also purchases minority interests in the form of common or preferred equity in the target companies, typically in conjunction with its debt investments or through a co-investment with a financial sponsor. The fund seeks to exit its investments through an initial public offering of common stock, a merger, a sale, or other recapitalization.