Head to Head Review: Royalty Management (NASDAQ:RMCO) and Portman Ridge Finance (NASDAQ:PTMN)

Royalty Management (NASDAQ:RMCOGet Free Report) and Portman Ridge Finance (NASDAQ:PTMNGet Free Report) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their institutional ownership, profitability, analyst recommendations, dividends, valuation, earnings and risk.

Analyst Ratings

This is a summary of recent ratings for Royalty Management and Portman Ridge Finance, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Royalty Management 1 0 0 0 1.00
Portman Ridge Finance 0 1 0 0 2.00

Portman Ridge Finance has a consensus target price of $14.00, suggesting a potential upside of 24.22%. Given Portman Ridge Finance’s stronger consensus rating and higher possible upside, analysts clearly believe Portman Ridge Finance is more favorable than Royalty Management.

Profitability

This table compares Royalty Management and Portman Ridge Finance’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Royalty Management -9.62% -2.12% -1.61%
Portman Ridge Finance -15.92% 11.49% 4.54%

Risk and Volatility

Royalty Management has a beta of -0.12, suggesting that its stock price is 112% less volatile than the S&P 500. Comparatively, Portman Ridge Finance has a beta of 0.6, suggesting that its stock price is 40% less volatile than the S&P 500.

Dividends

Royalty Management pays an annual dividend of $0.01 per share and has a dividend yield of 0.3%. Portman Ridge Finance pays an annual dividend of $1.88 per share and has a dividend yield of 16.7%. Royalty Management pays out -100.0% of its earnings in the form of a dividend. Portman Ridge Finance pays out -202.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Portman Ridge Finance is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider & Institutional Ownership

67.2% of Royalty Management shares are held by institutional investors. Comparatively, 30.1% of Portman Ridge Finance shares are held by institutional investors. 57.1% of Royalty Management shares are held by insiders. Comparatively, 2.1% of Portman Ridge Finance shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Royalty Management and Portman Ridge Finance”s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Royalty Management $810,000.00 56.56 -$110,000.00 ($0.01) -311.00
Portman Ridge Finance -$2.85 million -52.26 -$5.93 million ($0.93) -12.12

Royalty Management has higher revenue and earnings than Portman Ridge Finance. Royalty Management is trading at a lower price-to-earnings ratio than Portman Ridge Finance, indicating that it is currently the more affordable of the two stocks.

Summary

Portman Ridge Finance beats Royalty Management on 8 of the 15 factors compared between the two stocks.

About Royalty Management

(Get Free Report)

Royalty Management Holding Corporation provides environmental consulting and services in the United States. It is also involved in investing or purchasing assets, such as real estate and mining permits, patents, intellectual property, and emerging technologies. The company was incorporated in 2021 and is based in Fishers, Indiana.

About Portman Ridge Finance

(Get Free Report)

Portman Ridge Finance Corporation is a business development company specializing in investments in unitranche loans (including last out), first lien loans, second lien loans, subordinated debt, equity co-investment, mezzanine, buyout in middle market companies. It also makes acquisitions in businesses complementary to the firm's business. It primarily invests in healthcare, cargo transport, manufacturing, industrial & environmental services, logistics & distribution, media & telecommunications, real estate, education, automotive, agriculture, aerospace/defense, packaging, electronics, finance, non-durable consumer, consumer products, business services, utilities, insurance, and food and beverage sectors. The fund typically invests $1 million to $20 million in its portfolio companies. It provides senior secured term loans from $2 million to $20 million maturing in five to seven years; second lien term loans from $5 million to $15 million maturing in six to eight years; senior unsecured loans $5 million to $23 million maturing in six to eight years; mezzanine loans from $5 million to $15 million maturing in seven to ten years; and equity investments from $1 to $5 million. The fund targets the companies with EBITDA between $5 million and $25 million. While investing in debt securities, it invests in those middle market firms with EBITDA between $10 million and $50 million and/or total debt between $25 million and $150 million. It invests in minority, and majority or control equity positions alongside its private equity sponsor partners.

Receive News & Ratings for Royalty Management Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Royalty Management and related companies with MarketBeat.com's FREE daily email newsletter.