Rand Capital (NASDAQ:RAND) and PennantPark Investment (NASDAQ:PNNT) are both small-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitability, valuation, risk and earnings.
This table compares Rand Capital and PennantPark Investment’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This table compares Rand Capital and PennantPark Investment’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Rand Capital||$1.46 million||11.17||-$710,000.00||N/A||N/A|
|PennantPark Investment||$124.53 million||3.99||$61.71 million||$0.79||8.99|
PennantPark Investment has higher revenue and earnings than Rand Capital.
PennantPark Investment pays an annual dividend of $0.72 per share and has a dividend yield of 10.1%. Rand Capital does not pay a dividend. PennantPark Investment pays out 91.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Institutional & Insider Ownership
17.9% of Rand Capital shares are held by institutional investors. Comparatively, 42.6% of PennantPark Investment shares are held by institutional investors. 12.3% of Rand Capital shares are held by insiders. Comparatively, 2.0% of PennantPark Investment shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Risk & Volatility
Rand Capital has a beta of -0.04, suggesting that its stock price is 104% less volatile than the S&P 500. Comparatively, PennantPark Investment has a beta of 1.19, suggesting that its stock price is 19% more volatile than the S&P 500.
This is a summary of current recommendations for Rand Capital and PennantPark Investment, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
PennantPark Investment has a consensus price target of $8.00, indicating a potential upside of 12.68%. Given PennantPark Investment’s higher possible upside, analysts clearly believe PennantPark Investment is more favorable than Rand Capital.
PennantPark Investment beats Rand Capital on 10 of the 14 factors compared between the two stocks.
Rand Capital Company Profile
Rand Capital Corporation is a business development company specializing in venture capital and private equity investments. The firm prefers to make investments through equity or debt instruments in early venture, expansion stage, and in small to medium-sized privately held companies. It generally lends to more mature companies. The firm does not prefer to invest in real estate sector. It invests in companies that are engaged in the exploitation of new or unique products, technologies, or services. The firm invests in healthcare, consumer products, manufacturing, software, and professional services. It seeks to invest in companies based in the Western and Upstate New York region and its surrounding states with focus on Buffalo and Niagara region. The firm may invest in region within three to five hour drives from Western New York including Canada. It typically invests between $0.5 million and $1.5 million and the total investment in rounds is between $1 million and $5 million. The firm seeks to invest up to maximum of $3 million total per company as part of follow-on investments. It invest in startups and companies having annual revenue up to $10 million. The firm seeks to be a lead investor in companies within its geographical area and participates in syndicate/co-invest with other investors outside it. It prefers to invest in businesses that are unique or possess proprietary right. The firm prefers to be a minority investor and seeks to take a Board seat in its portfolio companies. It typically holds its investments for a period of five to seven years. Rand Capital Corporation was founded in 1969 and is based in Buffalo, New York.
PennantPark Investment Company Profile
PennantPark Investment Corporation specializes in direct and mezzanine investments in middle market companies. It invests in the form of mezzanine debt, senior secured loans, and equity investments. The fund typically invests in building and real estate, hotels and gaming, electronics, healthcare, education and childcare, financial services, printing and publishing, consumer products, business services, energy and utilities, distribution, oil and gas, media, environmental services, aerospace and defense, manufacturing industries and retail. It invests in equity securities and debt transactions through preferred stock, common stock, warrants, options, subordinated loans, mezzanine loans, and senior secured loans. It seeks to invest in companies based in the United States. The fund seeks to invest between $10 million and $50 million in its portfolio companies. Its mezzanine loans, senior secured loans, and other investments in its portfolio companies are between $15 million and $50 million. The fund may also make non-control equity and debt investments.
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