Financial Survey: Horizon Technology Finance (NASDAQ:HRZN) versus UBS Group (NYSE:UBS)

UBS Group (NYSE:UBS) and Horizon Technology Finance (NASDAQ:HRZN) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their risk, profitability, earnings, dividends, institutional ownership, analyst recommendations and valuation.

Volatility & Risk

UBS Group has a beta of 1.19, suggesting that its stock price is 19% more volatile than the S&P 500. Comparatively, Horizon Technology Finance has a beta of 1, suggesting that its stock price has a similar volatility profile to the S&P 500.

Profitability

This table compares UBS Group and Horizon Technology Finance’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
UBS Group	13.36%	10.77%	0.58%
Horizon Technology Finance	5.27%	11.15%	4.84%

Dividends

UBS Group pays an annual dividend of $0.36 per share and has a dividend yield of 0.7%. Horizon Technology Finance pays an annual dividend of $0.72 per share and has a dividend yield of 18.6%. UBS Group pays out 11.9% of its earnings in the form of a dividend. Horizon Technology Finance pays out -96.0% 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. UBS Group has raised its dividend for 5 consecutive years. Horizon Technology Finance is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a breakdown of recent ratings for UBS Group and Horizon Technology Finance, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
UBS Group	2	4	6	0	2.33
Horizon Technology Finance	1	5	1	0	2.00

UBS Group currently has a consensus price target of $60.30, suggesting a potential upside of 23.15%. Horizon Technology Finance has a consensus price target of $5.00, suggesting a potential upside of 29.20%. Given Horizon Technology Finance’s higher possible upside, analysts plainly believe Horizon Technology Finance is more favorable than UBS Group.

Institutional and Insider Ownership

4.9% of Horizon Technology Finance shares are held by institutional investors. 1.0% of UBS Group shares are held by company insiders. Comparatively, 0.3% of Horizon Technology Finance shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares UBS Group and Horizon Technology Finance”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
UBS Group	$76.12 billion	2.01	$7.77 billion	$3.03	16.16
Horizon Technology Finance	$96.02 million	2.70	-$2.66 million	($0.75)	-5.16

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

Summary

UBS Group beats Horizon Technology Finance on 10 of the 17 factors compared between the two stocks.

About UBS Group

UBS Group AG provides financial advice and solutions to private, institutional, and corporate clients worldwide. It operates through five divisions: Global Wealth Management, Personal & Corporate Banking, Asset Management, Investment Bank, and Non-core and Legacy. The company offers investment advice, estate and wealth planning, investing, corporate and banking, and investment management, as well as mortgage, securities-based, and structured lending solutions. It also provides personal banking products and services, such as deposits, credit and debit cards, and online and mobile banking, as well as lending, investments, retirement, and wealth management services; and corporate and institutional solutions, including equity and debt capital markets, syndicated and structured credit, private placements, leasing, traditional financing, and transaction banking solutions for payment and cash management services, trade and export finance, and global custody solutions. In addition, the company offers equities, fixed income, hedge funds, real estate and private markets, indexed and alternative beta strategies, asset allocation and currency investment strategies, customized multi-asset solutions, advisory and fiduciary services, and multi-manager hedge fund solutions and advisory services. Further, it advises clients on strategic business opportunities and helps them raise capital to fund their activities; enables its clients to buy, sell, and finance securities on capital markets and to manage their risks and liquidity; distributes, trades in, finances, and clears cash equities and equity-linked products; structures, originates, and distributes new equity and equity-linked issues; and originates, distributes, manages risk, and provides liquidity in foreign exchange, rates, credit and precious metals. The company was formerly known as UBS AG and changed its name to UBS Group AG in December 2014. UBS Group AG was founded in 1862 and is headquartered in Zurich, Switzerland.

About Horizon Technology Finance

Horizon Technology Finance Corporation is a business development company specializing in lending and and investing in development-stage investments. It focuses on making secured debt and venture lending investments to venture capital backed companies in the technology, life science, healthcare information and services, cleantech and sustainability industries. It seeks to invest in companies in the United States.