Sprott (NYSE:SII) versus Runway Growth Finance (NASDAQ:RWAY) Head-To-Head Comparison

Runway Growth Finance (NASDAQ:RWAY) and Sprott (NYSE:SII) are both small-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, dividends, earnings, valuation, risk, analyst recommendations and institutional ownership.

Risk and Volatility

Runway Growth Finance has a beta of 0.59, meaning that its share price is 41% less volatile than the S&P 500. Comparatively, Sprott has a beta of 1.1, meaning that its share price is 10% more volatile than the S&P 500.

Profitability

This table compares Runway Growth Finance and Sprott’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Runway Growth Finance	19.32%	13.67%	6.97%
Sprott	26.46%	13.50%	10.67%

Dividends

Runway Growth Finance pays an annual dividend of $1.60 per share and has a dividend yield of 15.4%. Sprott pays an annual dividend of $1.00 per share and has a dividend yield of 2.6%. Runway Growth Finance pays out 145.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Sprott pays out 55.9% of its earnings in the form of a dividend.

Earnings & Valuation

This table compares Runway Growth Finance and Sprott’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Runway Growth Finance	$164.21 million	2.43	$44.34 million	$1.10	9.43
Sprott	$169.02 million	5.99	$41.80 million	$1.79	21.88

Runway Growth Finance has higher earnings, but lower revenue than Sprott. Runway Growth Finance is trading at a lower price-to-earnings ratio than Sprott, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

64.6% of Runway Growth Finance shares are owned by institutional investors. Comparatively, 28.3% of Sprott shares are owned by institutional investors. 1.5% of Runway Growth Finance shares are owned by company insiders. Comparatively, 18.3% of Sprott shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Runway Growth Finance and Sprott, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Runway Growth Finance	0	6	2	0	2.25
Sprott	0	0	0	1	4.00

Runway Growth Finance presently has a consensus price target of $11.96, indicating a potential upside of 15.32%. Given Runway Growth Finance’s higher possible upside, equities research analysts clearly believe Runway Growth Finance is more favorable than Sprott.

Summary

Sprott beats Runway Growth Finance on 11 of the 17 factors compared between the two stocks.

About Runway Growth Finance

Runway Growth Finance Corp. is a business development company specializing investments in senior-secured loans to late stage and growth companies. It prefers to make investments in companies engaged in the technology, life sciences, healthcare and information services, business services and select consumer services and products sectors. It prefers to investments in companies engaged in electronic equipment and instruments, systems software, hardware, storage and peripherals and specialized consumer services, application software, healthcare technology, internet software and services, data processing and outsourced services, internet retail, human resources and employment services, biotechnology, healthcare equipment and education services. It invests in senior secured loans between $10 million and $75 million.

About Sprott

Sprott Inc. is a publicly owned asset management holding company. Through its subsidiaries, the firm provides asset management, portfolio management, wealth management, fund management, and administrative and consulting services to its clients. It offers mutual funds, hedge funds, and offshore funds, along with managed accounts. Further, the firm also provides broker-dealer activities. Sprott Inc. was formed on February 13, 2008 and is based in Toronto, Canada.