WhiteHorse Finance (NASDAQ:WHF) vs. Trinity Capital (NASDAQ:TRIN) Financial Analysis

Trinity Capital (NASDAQ:TRIN) and WhiteHorse Finance (NASDAQ:WHF) 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, risk, profitability, valuation and earnings.

Analyst Ratings

This is a summary of recent recommendations and price targets for Trinity Capital and WhiteHorse Finance, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Trinity Capital	1	1	5	1	2.75
WhiteHorse Finance	2	3	0	0	1.60

Trinity Capital presently has a consensus target price of $16.44, suggesting a potential upside of 6.67%. WhiteHorse Finance has a consensus target price of $7.75, suggesting a potential upside of 18.32%. Given WhiteHorse Finance’s higher probable upside, analysts clearly believe WhiteHorse Finance is more favorable than Trinity Capital.

Dividends

Trinity Capital pays an annual dividend of $2.04 per share and has a dividend yield of 13.2%. WhiteHorse Finance pays an annual dividend of $1.00 per share and has a dividend yield of 15.3%. Trinity Capital pays out 93.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. WhiteHorse Finance pays out 232.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Trinity Capital has increased its dividend for 1 consecutive years and WhiteHorse Finance has increased its dividend for 3 consecutive years. WhiteHorse Finance is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

24.6% of Trinity Capital shares are held by institutional investors. Comparatively, 13.2% of WhiteHorse Finance shares are held by institutional investors. 6.4% of Trinity Capital shares are held by company insiders. Comparatively, 2.5% of WhiteHorse Finance shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Trinity Capital	50.49%	15.51%	7.00%
WhiteHorse Finance	12.91%	9.93%	4.14%

Risk & Volatility

Trinity Capital has a beta of 0.53, suggesting that its share price is 47% less volatile than the S&P 500. Comparatively, WhiteHorse Finance has a beta of 0.56, suggesting that its share price is 44% less volatile than the S&P 500.

Earnings & Valuation

This table compares Trinity Capital and WhiteHorse Finance”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Trinity Capital	$237.69 million	4.91	$115.60 million	$2.19	7.04
WhiteHorse Finance	$92.82 million	1.64	$10.85 million	$0.43	15.23

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

Summary

Trinity Capital beats WhiteHorse Finance on 13 of the 18 factors compared between the two stocks.

About Trinity Capital

Trinity Capital Inc. is a business development company. It is a venture capital firm specializing in venture debt to growth stage companies looking for loans and/or equipment financing. Trinity Capital Inc. was founded in 2019 is based in Phoenix, Arizona with additional offices in the United States.

About WhiteHorse Finance

WhiteHorse Finance, Inc. is business development company, non-diversified, closed end management company specializing in originating senior secured loans, lower middle market, growth capital industries. It invests in broadline retail, office services and supplies, building products, health care services, health care supplies, research and consulting services, application software, home furnishings, specialized consumer services, data processing and outsourced services, leisure facilities, cable, and satellite. It prefers to invest in United States. It typically invests between $5 million to $25 million in companies having enterprise value of between $50 million and $350 million.