Amalgamated Financial (NASDAQ:AMAL) & Rand Capital (NASDAQ:RAND) Head-To-Head Contrast

Amalgamated Financial (NASDAQ:AMAL) and Rand Capital (NASDAQ:RAND) are both small-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, institutional ownership, profitability, dividends, analyst recommendations, risk and valuation.

Risk and Volatility

Amalgamated Financial has a beta of 0.81, meaning that its share price is 19% less volatile than the S&P 500. Comparatively, Rand Capital has a beta of 0.19, meaning that its share price is 81% less volatile than the S&P 500.

Institutional & Insider Ownership

75.9% of Amalgamated Financial shares are owned by institutional investors. 1.3% of Amalgamated Financial shares are owned by insiders. Comparatively, 68.2% of Rand Capital shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Amalgamated Financial and Rand Capital”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Amalgamated Financial	$453.17 million	2.50	$104.44 million	$3.41	11.09
Rand Capital	-$12.06 million	-2.89	$8.83 million	($2.69)	-4.37

Amalgamated Financial has higher revenue and earnings than Rand Capital. Rand Capital is trading at a lower price-to-earnings ratio than Amalgamated Financial, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings and target prices for Amalgamated Financial and Rand Capital, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Amalgamated Financial	0	1	2	0	2.67
Rand Capital	1	0	0	0	1.00

Amalgamated Financial currently has a consensus price target of $33.50, indicating a potential downside of 11.38%. Given Amalgamated Financial’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Amalgamated Financial is more favorable than Rand Capital.

Profitability

This table compares Amalgamated Financial and Rand Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Amalgamated Financial	23.05%	14.80%	1.31%
Rand Capital	-124.17%	6.37%	6.21%

Dividends

Amalgamated Financial pays an annual dividend of $0.68 per share and has a dividend yield of 1.8%. Rand Capital pays an annual dividend of $1.16 per share and has a dividend yield of 9.9%. Amalgamated Financial pays out 19.9% of its earnings in the form of a dividend. Rand Capital pays out -43.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Amalgamated Financial has raised its dividend for 4 consecutive years. Rand Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Amalgamated Financial beats Rand Capital on 13 of the 17 factors compared between the two stocks.

About Amalgamated Financial

Amalgamated Financial Corp. operates as the bank holding company for Amalgamated Bank that provides commercial and retail banking, investment management, and trust and custody services for commercial and retail customers in the United States. The company accepts various deposit products, including non-interest bearing accounts, interest-bearing demand products, savings accounts, money market accounts, NOW accounts, and certificates of deposit. It also provides various commercial loans comprising commercial and industrial, multifamily mortgage, and commercial real estate loans; residential mortgage loans; and retail loans, such as residential real estate, consumer solar, and consumer and other loans. In addition, the company offers online banking, bill payment, online cash management, and safe deposit box rental services; debit and ATM cards; and trust, custody, and investment management services comprising asset safekeeping, corporate actions, income collections, proxy, account transition, asset transfers, and conversion management services. Further, it provides investment products, such as funds spanning equity, fixed-income, real estate, and alternative investment products; and brokerage, asset management, and insurance products. Amalgamated Financial Corp. was founded in 1923 and is headquartered in New York, New York.

About Rand Capital

Rand Capital Corporation is a business development company specializing in subordinated debt with warrants or preferred equity and venture capital investments. Within private equity, the firm specializing in capital growth and lower middle market investments. Within venture capital, it specializing in early to late-stage private businesses. It does not prefer to invest in real estate sector. It prefers to invest in software, professional services, manufacturing, consumer, healthcare, automotive and public d stocks. It prefers to invest in East or Midwest U.S. operations sectors. It typically invests between $0.75 million and $5 million with initial target size of $1.5 million. It seeks to invest in companies having more than $2 million in revenue or having excess of $1.5 million and up to $5 million in EBITDA. It prefers to be a minority stake and seeks to take a Board seat in its portfolio companies. It typically holds its investments for a period up to five years.