Analyzing Garrison Capital (GARS) and Noah Holdings (NYSE:NOAH)

Garrison Capital (NASDAQ: GARS) and Noah Holdings (NYSE:NOAH) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, earnings, valuation, risk, profitability, analyst recommendations and dividends.

Analyst Ratings

This is a summary of current recommendations and price targets for Garrison Capital and Noah Holdings, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Garrison Capital 0 5 1 0 2.17
Noah Holdings 0 0 0 0 N/A

Garrison Capital currently has a consensus target price of $10.33, suggesting a potential upside of 24.80%. Given Garrison Capital’s higher probable upside, equities analysts clearly believe Garrison Capital is more favorable than Noah Holdings.

Volatility & Risk

Garrison Capital has a beta of 0.24, indicating that its share price is 76% less volatile than the S&P 500. Comparatively, Noah Holdings has a beta of 2.6, indicating that its share price is 160% more volatile than the S&P 500.

Earnings & Valuation

This table compares Garrison Capital and Noah Holdings’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Garrison Capital $42.95 million 3.09 -$4.80 million $0.34 24.35
Noah Holdings $362.03 million 6.06 $92.73 million $1.73 22.42

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

Institutional & Insider Ownership

20.9% of Garrison Capital shares are held by institutional investors. Comparatively, 41.3% of Noah Holdings shares are held by institutional investors. 5.8% of Garrison Capital shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Dividends

Garrison Capital pays an annual dividend of $1.12 per share and has a dividend yield of 13.5%. Noah Holdings does not pay a dividend. Garrison Capital pays out 329.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares Garrison Capital and Noah Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Garrison Capital 14.66% 9.33% 4.49%
Noah Holdings 29.39% 18.42% 11.94%

Summary

Noah Holdings beats Garrison Capital on 11 of the 15 factors compared between the two stocks.

About Garrison Capital

Garrison Capital Inc. is a managed, closed-end, non-diversified management investment company. The Company’s investment objective is to generate current income and capital appreciation by making investments primarily in debt securities and loans of the United States-based middle-market companies, which it defines as those having annual earnings before interest, taxes and depreciation, or EBITDA, of certain amount. It invests or provides direct lending in first lien senior secured loans, second lien senior secured loans, one-stop senior secured loans or unitranche loans, subordinated or mezzanine loans, unsecured consumer loans and to a lesser extent, selected equity co-investments in middle-market companies. The Company intends to generate risk-adjusted net returns by assembling a portfolio of investments. The Company’s investment advisor is Garrison Capital Advisers LLC.

About Noah Holdings

Noah Holdings Limited is a wealth management service provider with a focus on global wealth investment and asset allocation services for high net worth individuals and enterprises in China. The Company operates through three segments: wealth management, asset management and Internet finance. It also provides Internet finance services to clients in China. It provides direct access to China’s high net worth population. With approximately 1,100 relationship managers in over 130 branch offices, its coverage network includes China’s regions where high net worth population is concentrated, including the Yangtze River Delta, the Pearl River Delta, the Bohai Rim and other regions. Its product offerings consist primarily of over-the-counter (OTC) wealth management and OTC asset management products, mutual fund products and asset management plans originated in China and designed to cater to the needs of China’s high net worth population.

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