Main Street Capital Corporation (NYSE: MAIN) and Medallion Financial Corp. (NASDAQ:MFIN) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, profitabiliy, analyst recommendations, dividends, institutional ownership, valuation and risk.
This table compares Main Street Capital Corporation and Medallion Financial Corp.’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Main Street Capital Corporation||83.34%||10.01%||5.83%|
|Medallion Financial Corp.||85.80%||-0.83%||-0.34%|
Main Street Capital Corporation pays an annual dividend of $2.22 per share and has a dividend yield of 5.8%. Medallion Financial Corp. does not pay a dividend. Main Street Capital Corporation pays out 76.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Main Street Capital Corporation has increased its dividend for 6 consecutive years.
This is a breakdown of recent recommendations for Main Street Capital Corporation and Medallion Financial Corp., as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Main Street Capital Corporation||3||2||2||0||1.86|
|Medallion Financial Corp.||0||2||0||0||2.00|
Main Street Capital Corporation presently has a consensus price target of $37.00, suggesting a potential downside of 4.00%. Medallion Financial Corp. has a consensus price target of $7.25, suggesting a potential upside of 187.70%. Given Medallion Financial Corp.’s stronger consensus rating and higher possible upside, analysts clearly believe Medallion Financial Corp. is more favorable than Main Street Capital Corporation.
Valuation and Earnings
This table compares Main Street Capital Corporation and Medallion Financial Corp.’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Main Street Capital Corporation||$184.22 million||11.70||$161.62 million||$2.89||13.34|
|Medallion Financial Corp.||$20.59 million||2.93||$17.70 million||$0.74||3.41|
Main Street Capital Corporation has higher revenue and earnings than Medallion Financial Corp.. Medallion Financial Corp. is trading at a lower price-to-earnings ratio than Main Street Capital Corporation, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
27.0% of Main Street Capital Corporation shares are held by institutional investors. Comparatively, 18.1% of Medallion Financial Corp. shares are held by institutional investors. 5.6% of Main Street Capital Corporation shares are held by insiders. Comparatively, 15.1% of Medallion Financial Corp. 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.
Risk and Volatility
Main Street Capital Corporation has a beta of 1.05, indicating that its share price is 5% more volatile than the S&P 500. Comparatively, Medallion Financial Corp. has a beta of 1.67, indicating that its share price is 67% more volatile than the S&P 500.
Main Street Capital Corporation beats Medallion Financial Corp. on 10 of the 16 factors compared between the two stocks.
Main Street Capital Corporation Company Profile
Main Street Capital Corporation (MSCC) is a principal investment firm. MSCC’s principal investment objective is to maximize its portfolio’s total return by generating current income from the Company’s debt investments and capital appreciation from its equity and equity related investments, including warrants, convertible securities and other rights to acquire equity securities in a portfolio company. It is primarily focused on providing customized debt and equity financing to lower middle market (LMM) companies and debt capital to middle market (Middle Market) companies. It invests primarily in secured debt investments, equity investments, warrants and other securities of LMM companies and in secured debt investments of Middle Market companies. Its investment portfolio includes its investments in LMM portfolio companies, investments in Middle Market portfolio companies and Other Portfolio investments, among others. MSC Adviser I, LLC is the External Investment Manager.
Medallion Financial Corp. Company Profile
Medallion Financial Corp. is a closed-end, non-diversified management investment company. The Company is a specialty finance company, which is engaged in originating, acquiring and servicing loans that finance taxicab medallions and various types of commercial businesses. The Company operates in lending and investing operations segment. It originates and services medallion, secured commercial, and consumer loans, and invests in both marketable and nonmarketable securities. The Company’s subsidiary, Medallion Bank, also originates consumer loans for the purchase of recreational vehicles, boats, motorcycles, trailers, and to finance small-scale home improvements. The Company also conducts business through its asset-based lending division, Medallion Business Credit, an originator of loans to small businesses for the purpose of financing inventory and receivables.
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