Mentor Capital (OTCMKTS:MNTR) & Capitala Finance (OTCMKTS:CPTA) Financial Analysis

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Mentor Capital (OTCMKTS:MNTR) and Capitala Finance (NASDAQ:CPTA) 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, earnings, risk, profitability, valuation, analyst recommendations and dividends.

Valuation & Earnings

This table compares Mentor Capital and Capitala Finance’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Mentor Capital $5.28 million 1.35 -$410,000.00 N/A N/A
Capitala Finance $47.29 million 3.32 -$13.42 million $1.00 9.75

Mentor Capital has higher earnings, but lower revenue than Capitala Finance.

Insider and Institutional Ownership

0.0% of Mentor Capital shares are owned by institutional investors. Comparatively, 16.5% of Capitala Finance shares are owned by institutional investors. 7.3% of Capitala Finance shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Mentor Capital and Capitala Finance’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Mentor Capital -49.89% -18.43% -14.41%
Capitala Finance -34.43% 7.86% 3.14%

Dividends

Capitala Finance pays an annual dividend of $1.00 per share and has a dividend yield of 10.3%. Mentor Capital does not pay a dividend. Capitala Finance 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.

Risk & Volatility

Mentor Capital has a beta of 2.62, indicating that its stock price is 162% more volatile than the S&P 500. Comparatively, Capitala Finance has a beta of 1.12, indicating that its stock price is 12% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings for Mentor Capital and Capitala Finance, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Mentor Capital 0 0 0 0 N/A
Capitala Finance 0 1 0 0 2.00

Capitala Finance has a consensus price target of $9.00, indicating a potential downside of 7.69%. Given Capitala Finance’s higher possible upside, analysts plainly believe Capitala Finance is more favorable than Mentor Capital.

Summary

Capitala Finance beats Mentor Capital on 9 of the 12 factors compared between the two stocks.

Mentor Capital Company Profile

Mentor Capital, Inc. is a private equity firm specializing in acquisitions and emerging growth investments. The firm provides passive equity funding and liquidity to smaller companies and owners in the medical, marijuana and social use cannabis companies. It invests in shelf IPO's and public and private companies and seeks to provide public market access to owners of small private companies. The firm specializes in pre-IPO investments in Cannabis companies. In case of shelf IPO's, the firm prefers to invest in companies with sales greater than $40 million. It prefers to take significant position in its portfolio companies. The firm invests only in companies that have earnings. Mentor Capital, Inc. was founded in 1985 and is based in Ramona, California.

Capitala Finance Company Profile

Capitala Finance Corp. is a Business Development Company specializing in traditional mezzanine, senior subordinated and unitranche debt, first-lien and second-lien loans, equity investments in sponsored and non-sponsored lower and traditional middle market companies. The fund targets companies in the business services, commercial and professional services, manufacturing, consumer and retail, energy, and health-care industries. It typically considers investments in the United States. The fund invests $5 million and $50 million per transaction in companies with greater than $4.5 million of TTM EBITDA. It may also invest in senior secured positions in "stretch" senior secured loans. The fund makes minority equity co-investments, alongside management or financial sponsors.

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