Head-To-Head Comparison: StepStone Group (NASDAQ:STEP) & Trinity Capital (NASDAQ:TRIN)

Trinity Capital (NASDAQ:TRIN) and StepStone Group (NASDAQ:STEP) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, valuation, dividends, risk, profitability and earnings.

Volatility and Risk

Trinity Capital has a beta of 0.63, suggesting that its stock price is 37% less volatile than the S&P 500. Comparatively, StepStone Group has a beta of 1.29, suggesting that its stock price is 29% more volatile than the S&P 500.

Profitability

This table compares Trinity Capital and StepStone Group’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%
StepStone Group	-30.53%	43.38%	4.40%

Dividends

Trinity Capital pays an annual dividend of $2.04 per share and has a dividend yield of 11.6%. StepStone Group pays an annual dividend of $1.32 per share and has a dividend yield of 2.9%. 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. StepStone Group pays out -17.1% of its earnings in the form of a dividend. Trinity Capital has raised its dividend for 1 consecutive years and StepStone Group has raised its dividend for 3 consecutive years.

Analyst Ratings

This is a summary of current ratings and price targets for Trinity Capital and StepStone Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Trinity Capital	1	1	4	1	2.71
StepStone Group	1	2	8	0	2.64

Trinity Capital presently has a consensus price target of $16.67, indicating a potential downside of 5.17%. StepStone Group has a consensus price target of $67.44, indicating a potential upside of 48.98%. Given StepStone Group’s higher probable upside, analysts clearly believe StepStone Group is more favorable than Trinity Capital.

Insider and Institutional Ownership

24.6% of Trinity Capital shares are owned by institutional investors. Comparatively, 55.5% of StepStone Group shares are owned by institutional investors. 4.3% of Trinity Capital shares are owned by insiders. Comparatively, 15.7% of StepStone Group shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Trinity Capital and StepStone Group”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Trinity Capital	$216.31 million	7.69	$135.60 million	$1.75	10.04
StepStone Group	$1.99 billion	2.71	-$535.81 million	($7.72)	-5.86

Trinity Capital has higher earnings, but lower revenue than StepStone Group. StepStone Group is trading at a lower price-to-earnings ratio than Trinity Capital, indicating that it is currently the more affordable of 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 StepStone Group

StepStone Group Inc. is a private equity and venture capital firm specializing in direct, fund of funds, secondary direct, and secondary indirect investments. For direct investment, it seeks to invest in private debt, venture debt, incubation, mezzanine, distressed/vulture, seed/startup, early venture, mid venture, late venture, emerging growth, later stage, turnaround, growth capital, industry consolidation, recapitalization, buyout investments in mature and middle market companies. It prefers to invest in natural resources, technology, healthcare, services, materials, manufacturing, consumer durables, apparel, hotels, restaurants and leisure, media, retailing, power, utilities consumer staples, financials, telecommunication services, clean energy/renewables, transport, social, natural capital, infrastructure, corporate, real estate, credit and real asset. The firm invests globally with a focus on United States, North America, Europe, Asia, Latin America, Middle East, Africa, Brazil, Mexico, Argentina, Colombia, New Zealand, China, India, Korea, Japan, Taiwan, and Australia region. The firm invests between 5% and 40% in emerging markets. For fund of fund investment, it seeks to invest in private equity funds, venture capital funds, Special situation funds, Real estate funds, Infrastructure funds, mezzanine funds, and turnaround/distressed funds. It considers investments in both domestic and international funds. It also seeks to make co-investments and follow-on investments and considers partial interests in funds. StepStone Group Inc. was founded in 2007 and is based in New York, New York with additional offices across North America, South America, Europe, Australia and Asia.