Contrasting Hercules Capital (NYSE:HTGC) and AlTi Global (NASDAQ:ALTI)

AlTi Global (NASDAQ:ALTI) and Hercules Capital (NYSE:HTGC) are both finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, valuation, risk, institutional ownership, profitability and dividends.

Profitability

This table compares AlTi Global and Hercules Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AlTi Global	-40.86%	-1.61%	-0.74%
Hercules Capital	67.68%	16.01%	7.71%

Analyst Recommendations

This is a breakdown of recent recommendations for AlTi Global and Hercules Capital, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AlTi Global	2	0	0	0	1.00
Hercules Capital	0	2	5	1	2.88

Hercules Capital has a consensus price target of $18.89, suggesting a potential upside of 7.04%. Given Hercules Capital’s stronger consensus rating and higher possible upside, analysts plainly believe Hercules Capital is more favorable than AlTi Global.

Insider and Institutional Ownership

3.6% of AlTi Global shares are held by institutional investors. Comparatively, 19.7% of Hercules Capital shares are held by institutional investors. 2.2% of AlTi Global shares are held by company insiders. Comparatively, 2.0% of Hercules Capital shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares AlTi Global and Hercules Capital”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AlTi Global	$254.96 million	1.83	-$119.70 million	($1.39)	-2.16
Hercules Capital	$532.49 million	6.20	$339.74 million	$2.01	8.78

Hercules Capital has higher revenue and earnings than AlTi Global. AlTi Global is trading at a lower price-to-earnings ratio than Hercules Capital, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

AlTi Global has a beta of 0.72, meaning that its stock price is 28% less volatile than the S&P 500. Comparatively, Hercules Capital has a beta of 0.81, meaning that its stock price is 19% less volatile than the S&P 500.

Summary

Hercules Capital beats AlTi Global on 14 of the 15 factors compared between the two stocks.

About AlTi Global

AlTi Global, Inc. provides wealth and asset management services individuals, families, foundations, and institutions in the United States, the United Kingdom, and internationally. It operates through two segments, Wealth Management and Strategic Alternatives. The company offers discretionary investment management, non-discretionary investment advisory, and investment management and advisory services. It also provides trust and administration services, such as entity formation and management; creating or modifying trust instruments and administrative practices to meet beneficiary needs; corporate, trustee-executor, and fiduciary services; provision of directors and company secretarial services; administering entity ownership of intellectual property rights; advisory and administration services in connection with investments in marine and aviation assets; and administering entity ownership of fine art and collectibles. In addition, the company offers family office services comprising bookkeeping and back office services, private foundation management and grant making, oversight of trust administration, financial tracking and reporting, cash flow management and bill pay, and other financial services, as well as clients estate and wealth planning, family governance and education, and philanthropic and strategic services. It also provides ancillary fund management services, including investments, financial planning and strategy, sales and marketing, and back and middle office infrastructure and administration. The company offers strategic advisory, corporate advisory, brokerage, and placement agency services; structures, arranges, and provides investors with co-investment opportunities in various alternative assets; manages and advises public and private investment funds, as well as alternatives platform. The company was formerly known as Alvarium Tiedemann Holdings, Inc. and changed its name to AlTi Global, Inc. in April 2023. The company is based in New York, New York.

About Hercules Capital

Hercules Capital, Inc. is a business development company. The firm specializing in providing venture debt, debt, senior secured loans, and growth capital to privately held venture capital-backed companies at all stages of development from startups to expansion stage including select publicly listed companies and select special opportunity lower middle market companies that require additional capital to fund acquisitions, recapitalizations and refinancing and established-stage companies. The firm provides growth capital financing solutions for capital extension; management buy-out and corporate spin-out financing solutions; company, asset specific, or intellectual property acquisition financing; convertible, subordinated and/or mezzanine loans; domestic and international corporate expansion; vendor financing; revenue acceleration by sales and marketing development, and manufacturing expansion. It provides asset-based financing with a focus on cash flow; accounts receivable facilities; equipment loans or leases; equipment acquisition; facilities build-out and/or expansion; working capital revolving lines of credit; inventory. The firm also provides bridge financing to IPO or mergers and acquisitions or technology acquisition; dividend recapitalizations and other sources of investor liquidity; cash flow financing to protect against share price volatility; competitor acquisition; pre-IPO financing for extra cash on the balance sheet; public company financing to continue asset growth and production capacity; short-term bridge financing; and strategic and intellectual property acquisition financings. It also focuses on customized financing solutions, emerging growth, mid venture, and late venture financing. The firm invests primarily in structured debt with warrants and, to a lesser extent, in senior debt and equity investments. The firm generally seeks to invest in companies that have been operating for at least six to 12 months prior to the date of their investment. It prefers to invest in technology, SaaS Finance, energy technology, sustainable and renewable technology, and life sciences. Within technology the firm focuses on advanced specialty materials and chemicals; communication and networking, consumer and business products; consumer products and services, digital media and consumer internet; electronics and computer hardware; enterprise software and services; gaming; healthcare services; information services; business services; media, content and information; mobile; resource management; security software; semiconductors; semiconductors and hardware; and software sector. Within energy technology, it invests in agriculture; clean technology; energy and renewable technology, fuels, and power technology; geothermal; smart grid and energy efficiency and monitoring technologies; solar; and wind. Within life sciences, the firm invests in biopharmaceuticals; biotechnology tools; diagnostics; drug discovery, drug platform, development, and delivery; medical devices and equipment; surgical devices; therapeutics; pharma services; and specialty pharmaceuticals. Within sustainable and renewables, it invests in Vehicle Technology, Energy Generation and Storage, Ag Technology, Advanced Materials, and Industry 4.0. It also invests in educational services. The firm invests primarily in United States based companies and considers investment in the West Coast, Mid-Atlantic regions, Southeast and Midwest, particularly in the areas of software, biotech, and information services. The firm prefers to invest between $5 million and $200 million in equity per transactions. It invests generally between $1 million and $40 million in companies focused primarily on business services, communications, electronics, hardware, and healthcare services. The firm invests primarily in private companies but also have investments in public companies. For equity investments, the firm seeks to represent a controlling interest in its portfolio companies which may exceed 25% of the voting securities of such companies. The firm seeks to invest a limited portion of its assets in equipment-based loans to early-stage prospective portfolio companies. These loans are generally for amounts up to $3 million but may be up to $15 million for certain energy technology venture investments. The firm allows certain debt investments have the right to convert a portion of the debt investment into equity. It also co-invests with other private equity firms. The firm seeks to exit its investments through initial public offering, a private sale of equity interest to a third party, a merger or an acquisition of the company or a purchase of the equity position by the company or one of its stockholders. The firm has structured debt with warrants which typically have maturities of between two and seven years with an average of three years; senior debt with an investment horizon of less than three years; equipment loans with an investment horizon ranging from three to four years; and equity related securities with an investment horizon ranging from three to seven years. The firm prefers to invest through its balance sheet capital. The firm formerly known as Hercules Technology Growth Capital, Inc. Hercules Capital, Inc. was founded in December 2003 and is based in San Mateo, California with additional offices in North America and Europe.