Trinity Capital (NASDAQ:TRIN – Get Free Report) and Horizon Technology Finance (NASDAQ:HRZN – Get Free Report) are both small-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, risk, profitability, institutional ownership, valuation, earnings and analyst recommendations.
Volatility and Risk
Trinity Capital has a beta of 0.53, meaning that its share price is 47% less volatile than the S&P 500. Comparatively, Horizon Technology Finance has a beta of 1, meaning that its share price has a similar volatility profile to the S&P 500.
Valuation and Earnings
This table compares Trinity Capital and Horizon Technology Finance”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Trinity Capital | $237.69 million | 4.46 | $115.60 million | $2.23 | 6.77 |
| Horizon Technology Finance | $99.92 million | 2.76 | -$5.63 million | ($0.67) | -9.67 |
Trinity Capital has higher revenue and earnings than Horizon Technology Finance. Horizon Technology Finance is trading at a lower price-to-earnings ratio than Trinity Capital, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a breakdown of recent ratings for Trinity Capital and Horizon Technology Finance, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Trinity Capital | 1 | 1 | 2 | 0 | 2.25 |
| Horizon Technology Finance | 3 | 2 | 1 | 0 | 1.67 |
Trinity Capital currently has a consensus target price of $15.63, indicating a potential upside of 3.55%. Horizon Technology Finance has a consensus target price of $6.95, indicating a potential upside of 7.25%. Given Horizon Technology Finance’s higher possible upside, analysts clearly believe Horizon Technology 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 13.5%. Horizon Technology Finance pays an annual dividend of $1.32 per share and has a dividend yield of 20.4%. Trinity Capital pays out 91.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Horizon Technology Finance pays out -197.0% of its earnings in the form of a dividend. Trinity Capital has increased its dividend for 1 consecutive years. Horizon Technology Finance is clearly the better dividend stock, given its higher yield and lower payout ratio.
Insider & Institutional Ownership
24.6% of Trinity Capital shares are owned by institutional investors. Comparatively, 4.9% of Horizon Technology Finance shares are owned by institutional investors. 5.3% of Trinity Capital shares are owned by insiders. Comparatively, 1.3% of Horizon Technology Finance shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Profitability
This table compares Trinity Capital and Horizon Technology Finance’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Trinity Capital | 51.88% | 15.72% | 7.08% |
| Horizon Technology Finance | -24.19% | 15.01% | 6.02% |
Summary
Trinity Capital beats Horizon Technology Finance on 13 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 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.
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