Analyzing Barings Participation Investors (NYSE:MPV) and Portman Ridge Finance (NASDAQ:PTMN)

Barings Participation Investors (NYSE:MPV) and Portman Ridge Finance (NASDAQ:PTMN) are both small-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, risk, dividends, institutional ownership, analyst recommendations, profitability and earnings.

Valuation & Earnings

This table compares Barings Participation Investors and Portman Ridge Finance”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Barings Participation Investors	$16.83 million	11.76	N/A	N/A	N/A
Portman Ridge Finance	-$2.85 million	-55.55	-$5.93 million	($0.93)	-12.88

Barings Participation Investors has higher revenue and earnings than Portman Ridge Finance.

Profitability

This table compares Barings Participation Investors and Portman Ridge Finance’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Barings Participation Investors	N/A	N/A	N/A
Portman Ridge Finance	-15.92%	11.49%	4.54%

Analyst Ratings

This is a summary of current ratings and recommmendations for Barings Participation Investors and Portman Ridge Finance, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Barings Participation Investors	0	0	0	0	0.00
Portman Ridge Finance	0	1	0	0	2.00

Portman Ridge Finance has a consensus target price of $14.00, suggesting a potential upside of 16.86%. Given Portman Ridge Finance’s stronger consensus rating and higher probable upside, analysts plainly believe Portman Ridge Finance is more favorable than Barings Participation Investors.

Volatility and Risk

Barings Participation Investors has a beta of 0.45, suggesting that its stock price is 55% less volatile than the S&P 500. Comparatively, Portman Ridge Finance has a beta of 0.6, suggesting that its stock price is 40% less volatile than the S&P 500.

Insider and Institutional Ownership

30.1% of Portman Ridge Finance shares are held by institutional investors. 1.4% of Barings Participation Investors shares are held by insiders. Comparatively, 2.1% of Portman Ridge Finance shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Dividends

Barings Participation Investors pays an annual dividend of $1.48 per share and has a dividend yield of 7.9%. Portman Ridge Finance pays an annual dividend of $1.88 per share and has a dividend yield of 15.7%. Portman Ridge Finance pays out -202.2% of its earnings in the form of a dividend.

Summary

Portman Ridge Finance beats Barings Participation Investors on 9 of the 12 factors compared between the two stocks.

About Barings Participation Investors

Barings Participation Investors is a closed ended fixed income mutual fund launched and managed by Barings LLC. The fund invests in the fixed income markets of the United States. It primarily invests in below-investment grade, long-term corporate debt obligations which are directly purchased from its issuers. The fund also seeks to invest in warrants, conversion rights, or other equity related instruments. It benchmarks the performance of its portfolio against Standard and Poor's Industrials Composite, Russell 2000 Index, Lehman Brothers U.S. High Yield Index, and Lehman Brothers Intermediate U.S. Credit Index. The fund was formerly known as Babson Capital Participation Investors. Barings Participation Investors was formed on April 7, 1988 and is domiciled in the United States.

About Portman Ridge Finance

Portman Ridge Finance Corporation is a business development company specializing in investments in unitranche loans (including last out), first lien loans, second lien loans, subordinated debt, equity co-investment, mezzanine, buyout in middle market companies. It also makes acquisitions in businesses complementary to the firm's business. It primarily invests in healthcare, cargo transport, manufacturing, industrial & environmental services, logistics & distribution, media & telecommunications, real estate, education, automotive, agriculture, aerospace/defense, packaging, electronics, finance, non-durable consumer, consumer products, business services, utilities, insurance, and food and beverage sectors. The fund typically invests $1 million to $20 million in its portfolio companies. It provides senior secured term loans from $2 million to $20 million maturing in five to seven years; second lien term loans from $5 million to $15 million maturing in six to eight years; senior unsecured loans $5 million to $23 million maturing in six to eight years; mezzanine loans from $5 million to $15 million maturing in seven to ten years; and equity investments from $1 to $5 million. The fund targets the companies with EBITDA between $5 million and $25 million. While investing in debt securities, it invests in those middle market firms with EBITDA between $10 million and $50 million and/or total debt between $25 million and $150 million. It invests in minority, and majority or control equity positions alongside its private equity sponsor partners.