PennantPark Investment (NASDAQ:PNNT) and Molori Energy (OTCMKTS:MOLOF) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, institutional ownership, valuation, profitability, earnings, analyst recommendations and dividends.

Insider & Institutional Ownership

43.0% of PennantPark Investment shares are held by institutional investors. 2.0% of PennantPark Investment shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares PennantPark Investment and Molori Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
PennantPark Investment 18.01% 8.08% 3.94%
Molori Energy N/A N/A -386.99%

Earnings and Valuation

This table compares PennantPark Investment and Molori Energy’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
PennantPark Investment $108.28 million 3.96 $47.71 million $0.75 8.52
Molori Energy $680,000.00 1.94 -$5.04 million N/A N/A

PennantPark Investment has higher revenue and earnings than Molori Energy.

Analyst Recommendations

This is a summary of current ratings and price targets for PennantPark Investment and Molori Energy, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
PennantPark Investment 0 3 1 0 2.25
Molori Energy 0 0 0 0 N/A

PennantPark Investment presently has a consensus target price of $7.33, suggesting a potential upside of 14.76%. Given PennantPark Investment’s higher probable upside, analysts clearly believe PennantPark Investment is more favorable than Molori Energy.

Dividends

PennantPark Investment pays an annual dividend of $0.72 per share and has a dividend yield of 11.3%. Molori Energy does not pay a dividend. PennantPark Investment pays out 96.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Risk and Volatility

PennantPark Investment has a beta of 1.14, meaning that its stock price is 14% more volatile than the S&P 500. Comparatively, Molori Energy has a beta of 1.98, meaning that its stock price is 98% more volatile than the S&P 500.

Summary

PennantPark Investment beats Molori Energy on 11 of the 13 factors compared between the two stocks.

About PennantPark Investment

PennantPark Investment Corporation specializes in direct and mezzanine investments in middle market companies. It invests in the form of mezzanine debt, senior secured loans, and equity investments. The fund typically invests in building and real estate, hotels and gaming, electronics, healthcare, education and childcare, financial services, printing and publishing, consumer products, business services, energy and utilities, distribution, oil and gas, media, environmental services, aerospace and defense, manufacturing industries and retail. It invests in equity securities and debt transactions through preferred stock, common stock, warrants, options, subordinated loans, mezzanine loans, and senior secured loans. It seeks to invest in companies based in the United States. The fund seeks to invest between $10 million and $50 million in its portfolio companies. Its mezzanine loans, senior secured loans, and other investments in its portfolio companies are between $15 million and $50 million. The fund may also make non-control equity and debt investments.

About Molori Energy

Molori Energy Inc. explores for oil and gas resource deposits. The company was formerly known as Taipan Resources Inc. and changed its name to Molori Energy Inc. in January 2017. Molori Energy Inc. was incorporated in 2006 and is headquartered in Vancouver, Canada.

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