Reviewing Gladstone Investment (GAIN) & Dragon Victory International (LYL)

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Gladstone Investment (NASDAQ:GAIN) and Dragon Victory International (NASDAQ:LYL) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, earnings, risk, profitability and valuation.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Gladstone Investment and Dragon Victory International, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Gladstone Investment 0 1 2 0 2.67
Dragon Victory International 0 0 0 0 N/A

Gladstone Investment presently has a consensus target price of $10.50, indicating a potential upside of 1.45%. Given Gladstone Investment’s higher possible upside, equities analysts plainly believe Gladstone Investment is more favorable than Dragon Victory International.

Profitability

This table compares Gladstone Investment and Dragon Victory International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Gladstone Investment 140.89% 7.64% 4.53%
Dragon Victory International N/A N/A N/A

Institutional & Insider Ownership

15.0% of Gladstone Investment shares are owned by institutional investors. Comparatively, 0.1% of Dragon Victory International shares are owned by institutional investors. 2.5% of Gladstone Investment shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Gladstone Investment and Dragon Victory International’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Gladstone Investment $58.35 million 5.82 $60.68 million $0.82 12.62
Dragon Victory International $4.28 million 5.20 $190,000.00 N/A N/A

Gladstone Investment has higher revenue and earnings than Dragon Victory International.

Dividends

Gladstone Investment pays an annual dividend of $0.82 per share and has a dividend yield of 7.9%. Dragon Victory International does not pay a dividend. Gladstone Investment pays out 100.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Gladstone Investment has increased its dividend for 5 consecutive years.

Summary

Gladstone Investment beats Dragon Victory International on 12 of the 13 factors compared between the two stocks.

Gladstone Investment Company Profile

notes; senior subordinated debt securities such as senior subordinated loans and senior subordinated notes; junior subordinated debt securities such as subordinated notes and mezzanine loans; limited liability company interests, and warrants or options. The fund does not invest in start-ups. It seeks to invest in small and mid-sized companies based in the United States. The fund prefers to make debt investments between $5 million and $30 million and equity investments between $10 million and $40 million in companies. The fund seeks to invest in companies with sales between $20 million and $100 million. It seeks minority equity ownership and prefers to hold a board seat in its portfolio companies. It also prefers to take majority stake in its portfolio companies. The fund typically holds its investments for seven years and exits via sale or recapitalization, initial public offering, or sale to third party.

Dragon Victory International Company Profile

Dragon Victory International Limited provides reward-based crowdfunding in China. The company operates through four segments: Crowdfunding Platform Service, Incubation Services, Finder's Fees Services, and Auto-Parts Procurement Services. It operates 5etou, an online crowdfunding platform at 5etou.cn that enables project searching for funding to connect with funding sources. The company also operates auto-parts service operation that serves auto-repair shops seeking and transacting with auto-parts suppliers. In addition, it offers finder's service to assist companies to obtain loans or additional equity financing, introduce them to potential business partners, find merger candidates or other strategic relationships, or assist with feasibility studies. Further, the company provides business incubation services related to marketing, sales, strategic planning, and guidance and general resources in ancillary services, such as coordinating human resources, legal, accounting, operations, assisting with feasibility studies, and other types of services. Dragon Victory International Limited was founded in 2015 and is headquartered in Hangzhou, the People's Republic of China.

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