Allied Minds (OTCMKTS:ALLWF) and KCAP Financial (NASDAQ:KCAP) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, valuation, earnings, risk, dividends, analyst recommendations and profitability.

Volatility & Risk

Allied Minds has a beta of 0.36, meaning that its stock price is 64% less volatile than the S&P 500. Comparatively, KCAP Financial has a beta of 0.97, meaning that its stock price is 3% less volatile than the S&P 500.

Earnings & Valuation

This table compares Allied Minds and KCAP Financial’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Allied Minds N/A N/A N/A N/A N/A
KCAP Financial $27.09 million 0.00 -$9.57 million $0.27 N/A

Allied Minds has higher earnings, but lower revenue than KCAP Financial.

Institutional & Insider Ownership

27.6% of KCAP Financial shares are held by institutional investors. 8.1% of KCAP Financial shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Allied Minds and KCAP Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Allied Minds N/A N/A N/A
KCAP Financial -35.34% 5.81% 3.52%

Dividends

KCAP Financial pays an annual dividend of $0.40 per share. Allied Minds does not pay a dividend. KCAP Financial pays out 148.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Ratings

This is a summary of recent recommendations for Allied Minds and KCAP Financial, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Allied Minds 0 0 1 0 3.00
KCAP Financial 0 0 0 0 N/A

Summary

KCAP Financial beats Allied Minds on 6 of the 9 factors compared between the two stocks.

Allied Minds Company Profile

Allied Minds plc is a private equity and venture capital firm specializing in pre-seed, seed, start-up, and early stage technology investments. The firm prefers to invest across all products, services, and industries with a focus on the life science and technology sector including medical devices, diagnostics, biopharmaceuticals, big data, cyber security, communications, semiconductors, and food safety. It primarily invests in companies based in the United States, but depending on opportunities this could be expanded to a global network of partners and investments. The firm typically invests between $0.25 million and $1 million in seed investments and from $5 million to $10 million in Series A investments. The firm focuses on commercializing technologies from leading United States Universities and national labs. It seeks to take majority equity positions in its portfolio companies. The firm partners with universities to fund licensing deals and corporate spin-outs. It prefers to continue to invest alongside a syndicate for larger Series A and follow-on rounds. Allied Minds plc is based in Boston, Massachusetts with additional offices in London, United Kingdom; Los Angeles, California; Seattle, Washington; New York; New York and Washington, DC.

KCAP Financial Company Profile

KCAP Financial, Inc. is a business development company specializing in investments in debt securities portfolio, asset manager affiliates, and CLO fund securities. The firm prefers to invest in senior secured term loans, mezzanine debt, and equity securities primarily in privately-held middle market, and buyout companies. It also invests in debt and subordinated securities issued by CLO Fund Securities. The firm also makes investments in CLO Fund Securities managed by asset managers. Its investments under CLO Fund Securities comprises of minority investment in the subordinated securities or preferred stock of CLO Funds raised and managed by firm's Asset Manager Affiliates. The firm also invests in other investments such as loans to larger, publicly-traded companies, high-yield bonds and distressed debt securities. It also invests in first and second lien term loans. The firm also prefers to invest in secured and unsecured subordinated debt. It also makes acquisitions in businesses complementary to the firm's business. It primarily invests in healthcare, cargo transport, manufacturing, real estate, educate, automotive, agriculture, aerospace/defence, packaging, electronics, finance, non-durable consumer, utilities, insurance, and food and beverage sectors. The firm 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 firm targets the companies with EBITDA between $7.5 million and $50 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. The firm invests through its own balance sheet. KCAP Financial, Inc. was founded in August 2006 and is based in New York, New York.

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