Capitala Finance (NASDAQ:CPTA) and Mentor Capital (NASDAQ:MNTR) Critical Review

Capitala Finance (NASDAQ:CPTA) and Mentor Capital (OTCMKTS:MNTR) are both small-cap finance companies, but which is the better stock? We will compare the two companies based on the strength of their profitability, institutional ownership, valuation, earnings, dividends, analyst recommendations and risk.

Dividends

Capitala Finance pays an annual dividend of $1.00 per share and has a dividend yield of 10.1%. Mentor Capital does not pay a dividend. Capitala Finance pays out 100.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares Capitala Finance and Mentor Capital’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Capitala Finance -34.43% 7.86% 3.14%
Mentor Capital -49.89% -18.43% -14.41%

Valuation and Earnings

This table compares Capitala Finance and Mentor Capital’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Capitala Finance $47.29 million 3.36 -$13.42 million $1.00 9.88
Mentor Capital $5.28 million 1.35 -$410,000.00 N/A N/A

Mentor Capital has lower revenue, but higher earnings than Capitala Finance.

Insider & Institutional Ownership

16.5% of Capitala Finance shares are held by institutional investors. Comparatively, 0.0% of Mentor Capital shares are held by institutional investors. 7.3% of Capitala Finance shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Volatility & Risk

Capitala Finance has a beta of 1.12, suggesting that its stock price is 12% more volatile than the S&P 500. Comparatively, Mentor Capital has a beta of 2.61, suggesting that its stock price is 161% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations and price targets for Capitala Finance and Mentor Capital, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Capitala Finance 0 1 0 0 2.00
Mentor Capital 0 0 0 0 N/A

Capitala Finance presently has a consensus price target of $9.00, suggesting a potential downside of 8.91%. Given Capitala Finance’s higher probable upside, research analysts clearly believe Capitala Finance is more favorable than Mentor Capital.

Summary

Capitala Finance beats Mentor Capital on 9 of the 12 factors compared between the two stocks.

Capitala Finance Company Profile

Capitala Finance Corp. is a Business Development Company specializing in traditional mezzanine, senior subordinated and unitranche debt, first-lien and second-lien loans, equity investments in sponsored and non-sponsored lower and traditional middle market companies. The fund targets companies in the business services, commercial and professional services, manufacturing, consumer and retail, energy, and health-care industries. It typically considers investments in the United States. The fund invests $5 million and $50 million per transaction in companies with greater than $4.5 million of TTM EBITDA. It may also invest in senior secured positions in "stretch" senior secured loans. The fund makes minority equity co-investments, alongside management or financial sponsors.

Mentor Capital Company Profile

Mentor Capital, Inc. is a private equity firm specializing in acquisitions and emerging growth investments. The firm provides passive equity funding and liquidity to smaller companies and owners in the medical, marijuana and social use cannabis companies. It invests in shelf IPO's and public and private companies and seeks to provide public market access to owners of small private companies. The firm specializes in pre-IPO investments in Cannabis companies. In case of shelf IPO's, the firm prefers to invest in companies with sales greater than $40 million. It prefers to take significant position in its portfolio companies. The firm invests only in companies that have earnings. Mentor Capital, Inc. was founded in 1985 and is based in Ramona, California.

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