Comparing On Deck Capital (ONDK) and Medallion Financial Corp. (NASDAQ:MFIN)
On Deck Capital (NYSE: ONDK) and Medallion Financial Corp. (NASDAQ:MFIN) are both small-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their profitabiliy, valuation, earnings, dividends, institutional ownership, risk and analyst recommendations.
This is a summary of recent ratings and recommmendations for On Deck Capital and Medallion Financial Corp., as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|On Deck Capital||0||10||1||0||2.09|
|Medallion Financial Corp.||0||2||0||0||2.00|
On Deck Capital currently has a consensus target price of $5.73, suggesting a potential upside of 14.63%. Medallion Financial Corp. has a consensus target price of $7.25, suggesting a potential upside of 188.84%. Given Medallion Financial Corp.’s higher possible upside, analysts clearly believe Medallion Financial Corp. is more favorable than On Deck Capital.
This table compares On Deck Capital and Medallion Financial Corp.’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|On Deck Capital||-25.33%||-28.89%||-7.99%|
|Medallion Financial Corp.||85.80%||-0.83%||-0.34%|
Valuation and Earnings
This table compares On Deck Capital and Medallion Financial Corp.’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|On Deck Capital||$150.16 million||2.41||-$81.91 million||($1.13)||-4.42|
|Medallion Financial Corp.||$20.59 million||2.92||$17.70 million||$0.74||3.39|
Medallion Financial Corp. has higher revenue, but lower earnings than On Deck Capital. On Deck Capital is trading at a lower price-to-earnings ratio than Medallion Financial Corp., indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
58.4% of On Deck Capital shares are owned by institutional investors. Comparatively, 17.9% of Medallion Financial Corp. shares are owned by institutional investors. 25.4% of On Deck Capital shares are owned by insiders. Comparatively, 16.2% of Medallion Financial Corp. shares are owned 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.
Risk and Volatility
On Deck Capital has a beta of 2.39, suggesting that its share price is 139% more volatile than the S&P 500. Comparatively, Medallion Financial Corp. has a beta of 1.68, suggesting that its share price is 68% more volatile than the S&P 500.
Medallion Financial Corp. beats On Deck Capital on 7 of the 13 factors compared between the two stocks.
On Deck Capital Company Profile
On Deck Capital, Inc. offers an online platform for small business lending. The Company’s platform aggregates and analyzes data points from disparate data sources to assess the creditworthiness of small businesses. Small businesses apply for a term loan or line of credit on the Company’s Website, and using its OnDeck Score, the Company makes a funding decision and transfers the funds. The Company offers small businesses a suite of financing options with its term loans and lines of credit that can meet the needs of small businesses throughout their life cycle. Its internal sales force and customer service representatives provide assistance throughout the application process and the life of the loan. Its loans are priced based on a risk assessment generated by its data and analytics engine, which includes the OnDeck Score. Its platform touches every aspect of the customer life cycle, including customer acquisition, sales, scoring and underwriting, funding, and servicing and collections.
Medallion Financial Corp. Company Profile
Medallion Financial Corp. is a closed-end, non-diversified management investment company. The Company is a specialty finance company, which is engaged in originating, acquiring and servicing loans that finance taxicab medallions and various types of commercial businesses. The Company operates in lending and investing operations segment. It originates and services medallion, secured commercial, and consumer loans, and invests in both marketable and nonmarketable securities. The Company’s subsidiary, Medallion Bank, also originates consumer loans for the purchase of recreational vehicles, boats, motorcycles, trailers, and to finance small-scale home improvements. The Company also conducts business through its asset-based lending division, Medallion Business Credit, an originator of loans to small businesses for the purpose of financing inventory and receivables.
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