NeXt Innovation (NASDAQ: WHF) and WhiteHorse Finance (NASDAQ:WHF) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, risk, earnings, institutional ownership, analyst recommendations and valuation.

Analyst Ratings

This is a summary of current ratings and recommmendations for NeXt Innovation and WhiteHorse Finance, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NeXt Innovation 0 0 1 0 3.00
WhiteHorse Finance 0 2 3 0 2.60

NeXt Innovation presently has a consensus price target of $11.00, suggesting a potential upside of 57.82%. WhiteHorse Finance has a consensus price target of $14.30, suggesting a potential upside of 1.42%. Given NeXt Innovation’s stronger consensus rating and higher possible upside, equities analysts plainly believe NeXt Innovation is more favorable than WhiteHorse Finance.

Dividends

WhiteHorse Finance pays an annual dividend of $1.42 per share and has a dividend yield of 10.1%. NeXt Innovation does not pay a dividend. WhiteHorse Finance pays out 105.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Valuation & Earnings

This table compares NeXt Innovation and WhiteHorse Finance’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
NeXt Innovation $850,000.00 168.26 $17.56 million ($0.95) -7.34
WhiteHorse Finance $54.80 million 5.29 $34.44 million $1.35 10.44

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

Profitability

This table compares NeXt Innovation and WhiteHorse Finance’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
NeXt Innovation N/A -7.43% -3.93%
WhiteHorse Finance 86.68% 9.61% 5.63%

Volatility and Risk

NeXt Innovation has a beta of 1.56, indicating that its stock price is 56% more volatile than the S&P 500. Comparatively, WhiteHorse Finance has a beta of 0.65, indicating that its stock price is 35% less volatile than the S&P 500.

Institutional & Insider Ownership

33.2% of NeXt Innovation shares are held by institutional investors. Comparatively, 8.8% of WhiteHorse Finance shares are held by institutional investors. 1.0% of NeXt Innovation shares are held by company insiders. Comparatively, 1.2% of WhiteHorse 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.

Summary

WhiteHorse Finance beats NeXt Innovation on 10 of the 16 factors compared between the two stocks.

NeXt Innovation Company Profile

GSV Capital Corp. is specializing in growth capital, B round and beyond, emerging growth, and pre-IPO investments in late stage venture-backed private companies. It makes direct (primary rounds) investments in companies and also makes secondary direct investments. The fund may also invest in select publicly-traded equity securities of companies that otherwise meet its investment criteria. It seeks to invest in the technology subsectors of social/mobile marketplaces, sustainability, cloud computing and big data, social media, mobile computing and applications, software as a service, Internet commerce, green technology and education technology. The fund invests in the form of non-controlling equity and equity-related investments, including common stock, warrants, preferred stock and similar forms of senior equity, which may or may not be convertible into a portfolio company's common equity, and convertible debt securities with a significant equity component. It will invest in companies based in United States. It generally invests in companies with a market value of over $100 million. Typically, the firm exits its position within 18 months of going public, or 12 months after any relevant lock-up has expired.

WhiteHorse Finance Company Profile

WhiteHorse Finance, LLC is a business development company.

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