Westwood Holdings Group (NYSE:WHG – Get Free Report) and PennantPark Investment (NASDAQ:PNNT – Get Free Report) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, valuation, earnings, institutional ownership, risk, analyst recommendations and profitability.
Institutional & Insider Ownership
56.6% of Westwood Holdings Group shares are held by institutional investors. Comparatively, 26.6% of PennantPark Investment shares are held by institutional investors. 17.4% of Westwood Holdings Group shares are held by company insiders. Comparatively, 3.0% of PennantPark Investment shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Profitability
This table compares Westwood Holdings Group and PennantPark Investment’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Westwood Holdings Group | N/A | N/A | N/A |
| PennantPark Investment | 11.33% | 11.59% | 4.23% |
Analyst Ratings
This is a breakdown of recent ratings and target prices for Westwood Holdings Group and PennantPark Investment, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Westwood Holdings Group | 0 | 0 | 1 | 0 | 3.00 |
| PennantPark Investment | 1 | 3 | 1 | 0 | 2.00 |
PennantPark Investment has a consensus price target of $5.10, suggesting a potential upside of 76.17%. Given PennantPark Investment’s higher probable upside, analysts plainly believe PennantPark Investment is more favorable than Westwood Holdings Group.
Earnings & Valuation
This table compares Westwood Holdings Group and PennantPark Investment”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Westwood Holdings Group | N/A | N/A | N/A | $0.88 | 21.50 |
| PennantPark Investment | $21.50 million | 8.79 | $48.85 million | $0.16 | 18.09 |
PennantPark Investment has higher revenue and earnings than Westwood Holdings Group. PennantPark Investment is trading at a lower price-to-earnings ratio than Westwood Holdings Group, indicating that it is currently the more affordable of the two stocks.
Summary
PennantPark Investment beats Westwood Holdings Group on 5 of the 9 factors compared between the two stocks.
About Westwood Holdings Group
Westwood Holdings Group, Inc., through its subsidiaries, manages investment assets and provides services for its clients. The company operates in two segments, Advisory and Trust. The Advisory segment provides investment advisory services to corporate retirement plans, public retirement plans, endowments, foundations, individuals, and the Westwood Funds; and investment sub-advisory services to mutual funds, pooled investment vehicles, and its Trust segment. The Trust segment offers trust and custodial services; and participates in common trust funds that it sponsors to institutions and high net worth individuals. Westwood Holdings Group, Inc. was founded in 1983 and is based in Dallas, Texas.
About PennantPark Investment
PennantPark Investment Corporation, a business development company is a private equity fund specializes in direct and mezzanine investments in middle market companies. It invests in the form of mezzanine debt, senior secured loans, and equity investments. The fund typically invests in buildings and real estate, hotels, gaming and leisure, technology, telecommunications, transportation, information technology services, electronics, healthcare & pharmaceuticals, education and childcare, financial services, printing and publishing, consumer products, business services, energy & Related Services and utilities, distribution, oil and gas, media, environmental services, aerospace and defense, building materials, capital equipment, chemicals, plastics, & rubber, food & beverage, wholesale, manufacturing and basic industries and retail. It invests in equity securities and debt transactions through preferred stock, common stock, warrants, options, senior secured debt, subordinated debt, subordinated loans, first lien debt, mezzanine loans, and distressed debt securities and private equity co-investments. It seeks to invest in companies based in the United States. The fund seeks to invest between $10 million and $100 million cross the capital structure (senior secured loans, subordinated debt, and other investments) in its portfolio companies with EBITDA between $10 to $50 million. Its mezzanine loans, senior secured loans, and other investments in its portfolio companies are between $15 million and $50 million. The fund may also make non-control equity and debt investments.
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