Critical Contrast: TriplePoint Venture Growth BDC (NYSE:TPVG) & Sound Point Meridian Capital (NYSE:SPMC)

Sound Point Meridian Capital (NYSE:SPMC) and TriplePoint Venture Growth BDC (NYSE:TPVG) 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, profitability, analyst recommendations, institutional ownership, dividends, valuation and risk.

Profitability

This table compares Sound Point Meridian Capital and TriplePoint Venture Growth BDC’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sound Point Meridian Capital	N/A	N/A	N/A
TriplePoint Venture Growth BDC	44.58%	10.68%	4.58%

Earnings & Valuation

This table compares Sound Point Meridian Capital and TriplePoint Venture Growth BDC”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sound Point Meridian Capital	$72.51 million	1.75	-$118.49 million	($5.78)	-1.07
TriplePoint Venture Growth BDC	$90.93 million	1.92	$49.21 million	$0.99	4.33

TriplePoint Venture Growth BDC has higher revenue and earnings than Sound Point Meridian Capital. Sound Point Meridian Capital is trading at a lower price-to-earnings ratio than TriplePoint Venture Growth BDC, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

12.8% of TriplePoint Venture Growth BDC shares are held by institutional investors. 0.9% of Sound Point Meridian Capital shares are held by insiders. Comparatively, 1.5% of TriplePoint Venture Growth BDC shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Dividends

Sound Point Meridian Capital pays an annual dividend of $1.56 per share and has a dividend yield of 25.2%. TriplePoint Venture Growth BDC pays an annual dividend of $0.92 per share and has a dividend yield of 21.5%. Sound Point Meridian Capital pays out -27.0% of its earnings in the form of a dividend. TriplePoint Venture Growth BDC pays out 92.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Sound Point Meridian Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a summary of current ratings and recommmendations for Sound Point Meridian Capital and TriplePoint Venture Growth BDC, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sound Point Meridian Capital	0	3	1	0	2.25
TriplePoint Venture Growth BDC	2	3	0	0	1.60

Sound Point Meridian Capital currently has a consensus price target of $15.12, indicating a potential upside of 144.35%. TriplePoint Venture Growth BDC has a consensus price target of $5.17, indicating a potential upside of 20.58%. Given Sound Point Meridian Capital’s stronger consensus rating and higher possible upside, equities analysts clearly believe Sound Point Meridian Capital is more favorable than TriplePoint Venture Growth BDC.

Volatility & Risk

Sound Point Meridian Capital has a beta of 1.2, meaning that its stock price is 20% more volatile than the S&P 500. Comparatively, TriplePoint Venture Growth BDC has a beta of 1.37, meaning that its stock price is 37% more volatile than the S&P 500.

Summary

TriplePoint Venture Growth BDC beats Sound Point Meridian Capital on 11 of the 16 factors compared between the two stocks.

About Sound Point Meridian Capital

Sound Point Meridian Capital Inc. is an externally managed, non-diversified closed-end management investment company. Its investment objective is to generate high current income, with a secondary objective to generate capital appreciation, by investing primarily in third-party collateralized loan obligation equity and mezzanine tranches. Sound Point Meridian Capital Inc. is based in NEW YORK.

About TriplePoint Venture Growth BDC

TriplePoint Venture Growth BDC Corp. is a business development company specializing investments in venture capital-backed companies at the growth stage investments. It also provides debt financing to venture growth space companies which includes growth capital loans, secured and customized loans, equipment financings, revolving loans and direct equity investments. The fund seeks to invest in e-commerce, entertainment, technology and life sciences sector. Within technology the areas of focus include: Security, wireless communication equipments, network system and software, business applications software, conferencing equipments/services .big data, cloud computing, data storage, electronics, energy efficiency, hardware, information services, internet and media, networking, semiconductors, software, software as a service, and other technology related subsectors and within life sciences the areas of focus include: biotechnology, bio fuels/bio mass, diagnostic testing and bioinformatics, drug delivery, drug discovery, healthcare information systems, healthcare services, medical, surgical and therapeutic devices, pharmaceuticals and other life science related subsectors. Within growth capital loans it invests between $5 million and $50 million, for equipment financings it invests between $5 million and $25 million, for revolving loans it invests between $1 million and $25 million, and for direct equity investments it may invest between $0.1 million and $5 million (generally not exceeding 5% of the company’s total equity). The debt financing products are typically structured as lines of credit and it invests through warrants and secured loans. It targeted returns between 10% and 18%. It does not take board seat in the company.