Sound Point Meridian Capital (NYSE:SPMC) and Trinity Capital (NASDAQ:TRIN) Head to Head Contrast

Trinity Capital (NASDAQ:TRIN) and Sound Point Meridian Capital (NYSE:SPMC) are both small-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, profitability, earnings, institutional ownership, risk and analyst recommendations.

Analyst Ratings

This is a summary of current ratings and target prices for Trinity Capital and Sound Point Meridian Capital, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Trinity Capital	1	1	3	1	2.67
Sound Point Meridian Capital	0	2	1	1	2.75

Trinity Capital presently has a consensus price target of $16.60, indicating a potential downside of 2.70%. Sound Point Meridian Capital has a consensus price target of $15.12, indicating a potential upside of 141.57%. Given Sound Point Meridian Capital’s stronger consensus rating and higher probable upside, analysts plainly believe Sound Point Meridian Capital is more favorable than Trinity Capital.

Valuation & Earnings

This table compares Trinity Capital and Sound Point Meridian Capital”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Trinity Capital	$216.31 million	7.47	$135.60 million	$1.75	9.75
Sound Point Meridian Capital	-$121.96 million	-1.05	-$118.47 million	($5.78)	-1.08

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

Risk and Volatility

Trinity Capital has a beta of 0.63, meaning that its share price is 37% less volatile than the S&P 500. Comparatively, Sound Point Meridian Capital has a beta of 1.2, meaning that its share price is 20% more volatile than the S&P 500.

Institutional & Insider Ownership

24.6% of Trinity Capital shares are held by institutional investors. 4.3% of Trinity Capital shares are held by company insiders. Comparatively, 0.9% of Sound Point Meridian Capital shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Dividends

Trinity Capital pays an annual dividend of $2.04 per share and has a dividend yield of 12.0%. Sound Point Meridian Capital pays an annual dividend of $1.56 per share and has a dividend yield of 24.9%. Trinity Capital pays out 116.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Sound Point Meridian Capital pays out -27.0% of its earnings in the form of a dividend. Trinity Capital has increased its dividend for 1 consecutive years. Sound Point Meridian Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Trinity Capital and Sound Point Meridian Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Trinity Capital	43.45%	14.94%	6.69%
Sound Point Meridian Capital	N/A	N/A	N/A

Summary

Trinity Capital beats Sound Point Meridian Capital on 12 of the 17 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 Sound Point Meridian Capital

Sound Point Meridian Capital Inc. is an externally managed, non-diversified closed-end management investment company. Its investment objective is to generate high current income, with a secondary objective to generate capital appreciation, by investing primarily in third-party collateralized loan obligation equity and mezzanine tranches. Sound Point Meridian Capital Inc. is based in NEW YORK.