Comparing Waton Financial (NASDAQ:WTF) & CION Investment (NYSE:CION)

CION Investment (NYSE:CION) and Waton Financial (NASDAQ:WTF) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, dividends, profitability, valuation and risk.

Volatility & Risk

CION Investment has a beta of 1.11, suggesting that its share price is 11% more volatile than the S&P 500. Comparatively, Waton Financial has a beta of 1.2, suggesting that its share price is 20% more volatile than the S&P 500.

Insider and Institutional Ownership

32.0% of CION Investment shares are held by institutional investors. 0.6% of CION Investment shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for CION Investment and Waton Financial, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CION Investment	1	2	0	0	1.67
Waton Financial	1	0	0	0	1.00

CION Investment currently has a consensus price target of $6.50, suggesting a potential downside of 9.93%. Given CION Investment’s stronger consensus rating and higher possible upside, equities research analysts clearly believe CION Investment is more favorable than Waton Financial.

Profitability

This table compares CION Investment and Waton Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CION Investment	1.17%	11.95%	4.52%
Waton Financial	N/A	N/A	N/A

Earnings & Valuation

This table compares CION Investment and Waton Financial”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CION Investment	$240.82 million	1.47	-$20.63 million	$0.06	120.28
Waton Financial	$11.08 million	13.11	-$15.15 million	N/A	N/A

Waton Financial has lower revenue, but higher earnings than CION Investment.

Summary

CION Investment beats Waton Financial on 8 of the 11 factors compared between the two stocks.

About CION Investment

CION Investment Corporation is a business development company. It specializes in investments in senior secured loans, including unitranche loans, First Lien, second lien loans, long-term subordinated loans, and mezzanine loans; equity interests such as warrants or options; and corporate bonds; and other debt securities in middle-market companies. The firm invests in growth capital, acquisitions, leveraged buyouts, market/product expansion, refinancing and recapitalization. The fund also invests up to 30 percent of their assets opportunistically in other types of investments, including the securities of larger public companies and foreign securities. It also makes investments in the secondary loan market. The fund does not invest in start-up companies, turnaround situations, or companies with speculative business plans. The fund prefers to invest in high tech industries, healthcare, pharmaceuticals, business services, media, chemicals, plastic, rubber, telecommunication, consumer services, advertising, printing and publishing, consumer goods, durables, diversified financials, and other industries. It also invests in homebuilding, restaurants, beverage and tobacco bars, broadcasting, distributors, Non-durable good distribution, food beverage and tobacco, energy, oil gas and consumables fuels, insurance, aerospace and defense, industrial machinery, paper and forest product machinery, information technology, metals and mining, and real estate. It primarily seeks to invest in the United States. The fund seeks to invest between $5 million and $50 million in companies with an EBITDA between $25 million and $75 million with average targeted hold of $25 million. It also purchases minority interests in the form of common or preferred equity in the target companies, typically in conjunction with its debt investments or through a co-investment with a financial sponsor. The fund seeks to exit its investments through an initial public offering of common stock, a merger, a sale, or other recapitalization.

About Waton Financial

Waton Financial Ltd. is a holding company, which engages in the provision of securities brokerage and financial technology services. It is also involved in software licensing and related support services including the licensing of trading platform app, upgrades and enhancements, maintenance, and other related services to financial institutions. The company was founded on June 25, 2010 and is headquartered in Hong Kong.