Critical Survey: CION Investment (NYSE:CION) vs. Amalgamated Financial (NASDAQ:AMAL)

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

Risk & Volatility

CION Investment has a beta of 1.1, meaning that its stock price is 10% more volatile than the S&P 500. Comparatively, Amalgamated Financial has a beta of 0.8, meaning that its stock price is 20% less volatile than the S&P 500.

Insider & Institutional Ownership

32.0% of CION Investment shares are held by institutional investors. Comparatively, 75.9% of Amalgamated Financial shares are held by institutional investors. 0.6% of CION Investment shares are held by insiders. Comparatively, 1.6% of Amalgamated Financial shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current ratings and target prices for CION Investment and Amalgamated Financial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CION Investment	1	2	0	0	1.67
Amalgamated Financial	1	1	1	0	2.00

CION Investment currently has a consensus price target of $6.50, indicating a potential downside of 6.94%. Amalgamated Financial has a consensus price target of $44.00, indicating a potential downside of 1.46%. Given Amalgamated Financial’s stronger consensus rating and higher possible upside, analysts plainly believe Amalgamated Financial is more favorable than CION Investment.

Dividends

CION Investment pays an annual dividend of $1.20 per share and has a dividend yield of 17.2%. Amalgamated Financial pays an annual dividend of $0.68 per share and has a dividend yield of 1.5%. CION Investment pays out -3,000.0% of its earnings in the form of a dividend. Amalgamated Financial pays out 19.8% 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. CION Investment has increased its dividend for 1 consecutive years and Amalgamated Financial has increased its dividend for 4 consecutive years. CION Investment is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings & Valuation

This table compares CION Investment and Amalgamated 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	1.44	-$20.63 million	($0.04)	-174.63
Amalgamated Financial	$453.17 million	2.94	$104.45 million	$3.44	12.98

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
CION Investment	-0.41%	11.96%	4.64%
Amalgamated Financial	22.33%	13.89%	1.23%

Summary

Amalgamated Financial beats CION Investment on 13 of the 17 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 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.