Head-To-Head Contrast: Runway Growth Finance (NASDAQ:RWAY) versus Moelis & Company (NYSE:MC)

Moelis & Company (NYSE:MC) and Runway Growth Finance (NASDAQ:RWAY) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, profitability, dividends, risk, analyst recommendations, earnings and institutional ownership.

Earnings and Valuation

This table compares Moelis & Company and Runway Growth Finance”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Moelis & Company	$1.52 billion	2.88	$233.04 million	$2.94	18.98
Runway Growth Finance	$137.33 million	1.99	$34.05 million	$0.15	44.20

Moelis & Company has higher revenue and earnings than Runway Growth Finance. Moelis & Company is trading at a lower price-to-earnings ratio than Runway Growth Finance, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Moelis & Company and Runway Growth Finance, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Moelis & Company	0	6	2	0	2.25
Runway Growth Finance	1	4	2	0	2.14

Moelis & Company currently has a consensus target price of $68.17, indicating a potential upside of 22.17%. Runway Growth Finance has a consensus target price of $8.40, indicating a potential upside of 26.70%. Given Runway Growth Finance’s higher probable upside, analysts plainly believe Runway Growth Finance is more favorable than Moelis & Company.

Volatility and Risk

Moelis & Company has a beta of 1.87, meaning that its stock price is 87% more volatile than the S&P 500. Comparatively, Runway Growth Finance has a beta of 0.7, meaning that its stock price is 30% less volatile than the S&P 500.

Dividends

Moelis & Company pays an annual dividend of $2.60 per share and has a dividend yield of 4.7%. Runway Growth Finance pays an annual dividend of $1.32 per share and has a dividend yield of 19.9%. Moelis & Company pays out 88.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Runway Growth Finance pays out 880.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Moelis & Company has increased its dividend for 1 consecutive years.

Profitability

This table compares Moelis & Company and Runway Growth Finance’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Moelis & Company	14.22%	39.62%	17.34%
Runway Growth Finance	7.62%	11.73%	5.41%

Institutional and Insider Ownership

91.5% of Moelis & Company shares are held by institutional investors. Comparatively, 64.6% of Runway Growth Finance shares are held by institutional investors. 6.3% of Moelis & Company shares are held by company insiders. Comparatively, 1.0% of Runway Growth Finance shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

Moelis & Company beats Runway Growth Finance on 13 of the 16 factors compared between the two stocks.

About Moelis & Company

Moelis & Company is an independent investment bank that provides strategic and financial advice to corporations, governments, financial sponsors and investors. Its advisory work includes mergers and acquisitions, restructurings, recapitalizations, liability management and other complex financial matters. Founded in 2007 by investment banker Kenneth Moelis, the firm has expanded from its U.S. base to serve clients through offices across the Americas, Europe, the Middle East and Asia. Its teams advise clients on transactions and strategic decisions across a range of industries.

About Runway Growth Finance

Runway Growth Finance Corp. is a business development company that provides debt financing to growth-stage businesses. Its investments are primarily loans to companies that may have limited access to traditional financing as they expand. The company focuses on senior secured loans and other debt investments, sometimes including equity-related features. It is externally managed by Runway Growth Capital LLC, an investment firm specializing in lending to growth companies. Runway Growth Finance began operations in 2015 and primarily serves businesses in the United States and Canada.