MidCap Financial Investment (NASDAQ:MFIC – Get Rating) and Horizon Technology Finance (NASDAQ:HRZN – Get Rating) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, earnings, valuation, risk, institutional ownership, dividends and analyst recommendations.
Dividends
MidCap Financial Investment pays an annual dividend of $1.48 per share and has a dividend yield of 11.8%. Horizon Technology Finance pays an annual dividend of $1.32 per share and has a dividend yield of 10.7%. MidCap Financial Investment pays out 202.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Horizon Technology Finance pays out 163.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. MidCap Financial Investment has raised its dividend for 1 consecutive years and Horizon Technology Finance has raised its dividend for 1 consecutive years.
Get MidCap Financial Investment alerts:Insider and Institutional Ownership
29.3% of MidCap Financial Investment shares are owned by institutional investors. Comparatively, 9.8% of Horizon Technology Finance shares are owned by institutional investors. 0.9% of MidCap Financial Investment shares are owned by insiders. Comparatively, 1.5% of Horizon Technology Finance shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Analyst Recommendations
This is a summary of recent ratings for MidCap Financial Investment and Horizon Technology Finance, as reported by MarketBeat.com.| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| MidCap Financial Investment | 0 | 2 | 1 | 0 | 2.33 |
| Horizon Technology Finance | 1 | 4 | 0 | 0 | 1.80 |
MidCap Financial Investment presently has a consensus target price of $12.17, suggesting a potential downside of 3.36%. Horizon Technology Finance has a consensus target price of $10.88, suggesting a potential downside of 11.66%. Given MidCap Financial Investment's stronger consensus rating and higher probable upside, equities analysts clearly believe MidCap Financial Investment is more favorable than Horizon Technology Finance.
Earnings & Valuation
This table compares MidCap Financial Investment and Horizon Technology Finance's revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| MidCap Financial Investment | $60.09 million | 13.71 | $82.36 million | $0.73 | 17.25 |
| Horizon Technology Finance | $60.01 million | 5.42 | $27.78 million | $0.81 | 15.20 |
MidCap Financial Investment has higher revenue and earnings than Horizon Technology Finance. Horizon Technology Finance is trading at a lower price-to-earnings ratio than MidCap Financial Investment, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
MidCap Financial Investment has a beta of 1.6, suggesting that its stock price is 60% more volatile than the S&P 500. Comparatively, Horizon Technology Finance has a beta of 1.18, suggesting that its stock price is 18% more volatile than the S&P 500.
Profitability
This table compares MidCap Financial Investment and Horizon Technology Finance's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| MidCap Financial Investment | 20.92% | 9.54% | 3.67% |
| Horizon Technology Finance | 26.58% | 11.93% | 5.57% |
Summary
MidCap Financial Investment beats Horizon Technology Finance on 10 of the 16 factors compared between the two stocks.
About MidCap Financial Investment
(Get Rating)
Apollo Investment Corporation (NASDAQ: AINV) , a Maryland corporation organized on February 2, 2004, is a closed-end, externally managed, non-diversified management investment company that has elected to be treated as a business development company ("BDC") under the Investment Company Act of 1940 (the "1940 Act"). In addition, for tax purposes we have elected to be treated as a regulated investment company ("RIC") under the Internal Revenue Code of 1986, as amended ("the Code"). Our investment objective is to generate current income and capital appreciation. We invest in various forms of debt investments including senior secured loans, subordinated and mezzanine investments and/or equity in private middle-market companies. From time to time, we may also invest in the securities of public companies. Our portfolio is comprised primarily of investments in subordinated debt, sometimes referred to as mezzanine debt, and senior secured loans of private middle-market companies that, in the case of senior secured loans, generally are not broadly syndicated and whose aggregate tranche size is typically less than $300 million. From time to time, our portfolio also includes equi
About Horizon Technology Finance
(Get Rating)
Horizon Technology Finance Corp. operates as a specialty finance company, which engages in the provision of capital in the form of secured loans to venture capital backed companies. It is also involved in lending and investing in portfolio companies in technology, life science, healthcare information and services and cleantech industries. The company was founded by John C. Bombara, Daniel S. Devorsetz, Robert D. Pomeroy and Gerald A. Michaud on March 16, 2010 and is headquartered in Farmington, CT.
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