CION Investment (NYSE:CION) vs. Main Street Capital (NYSE:MAIN) Head-To-Head Analysis

CION Investment (NYSE:CION) and Main Street Capital (NYSE:MAIN) are both finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, profitability, dividends, valuation, earnings, risk and analyst recommendations.

Earnings & Valuation

This table compares CION Investment and Main Street Capital”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CION Investment	$252.43 million	2.05	$33.90 million	$0.51	19.50
Main Street Capital	$541.03 million	10.05	$508.08 million	$6.03	10.07

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

Analyst Recommendations

This is a breakdown of current recommendations for CION Investment and Main Street Capital, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CION Investment	1	1	0	1	2.33
Main Street Capital	0	5	4	0	2.44

CION Investment currently has a consensus price target of $8.50, suggesting a potential downside of 14.53%. Main Street Capital has a consensus price target of $62.43, suggesting a potential upside of 2.83%. Given Main Street Capital’s stronger consensus rating and higher probable upside, analysts plainly believe Main Street Capital is more favorable than CION Investment.

Dividends

CION Investment pays an annual dividend of $1.44 per share and has a dividend yield of 14.5%. Main Street Capital pays an annual dividend of $3.06 per share and has a dividend yield of 5.0%. CION Investment pays out 282.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Main Street Capital pays out 50.7% of its earnings in the form of a dividend. CION Investment has raised its dividend for 1 consecutive years and Main Street Capital has raised its dividend for 4 consecutive years.

Volatility and Risk

CION Investment has a beta of 1.07, meaning that its share price is 7% more volatile than the S&P 500. Comparatively, Main Street Capital has a beta of 0.8, meaning that its share price is 20% less volatile than the S&P 500.

Profitability

This table compares CION Investment and Main Street Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CION Investment	10.59%	12.02%	4.91%
Main Street Capital	95.59%	12.39%	6.77%

Institutional & Insider Ownership

32.0% of CION Investment shares are held by institutional investors. Comparatively, 20.3% of Main Street Capital shares are held by institutional investors. 0.6% of CION Investment shares are held by insiders. Comparatively, 4.1% of Main Street Capital shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

Main Street Capital beats CION Investment on 13 of the 18 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 Main Street Capital

Main Street Capital Corporation is a business development company specializes in equity capital to lower middle market companies. The firm specializing in recapitalizations, management buyouts, refinancing, family estate planning, management buyouts, refinancing, industry consolidation, mature, later stage emerging growth. The firm also provides debt capital to middle market companies for acquisitions, management buyouts, growth financings, recapitalizations, and refinancing. The firm seeks to partner with entrepreneurs, business owners and management teams and generally provides “one stop” financing alternatives within its lower middle market portfolio. It prefers to invest in air freight and logistics, auto components, building products, chemicals, commercial services, computers, construction and engineering, consumer finance, consumer services, electronic equipment, energy equipment and services, financial services, health care equipment, health care providers, hotels, restaurants, and leisure, internet software and services, IT Services, machinery, oil, gas and consumable fuels, paper and forest products, professional and industrial services, road and rail, software, specialty retail, telecommunication, consumer discretionary, energy, materials, technology, and transportation. The firm typically invests in lower middle market companies generally with annual revenues between $10 million and $150 million. It prefers to invest in ranging between $5 million and $100 million in equity investment and enterprise value in ranging between $3 million and $20 million. The firm typically prefers to invest in the range of $5 million and $150 million per transaction in debt investment value and in the range of $3 million and $75 million in annual EBITDA in between $3 million and $25 million in lower middle market $5 million and $75 million in credit solution. The firm’s middle market debt investments are made in businesses that are generally larger in size than its lower middle market portfolio companies. It takes 5 percent minority and up to 50 percent majority equity investments. Main Street Capital Corporation was founded in 2007 and is based in Houston, Texas with an additional office in Chojnów, Poland.