Head to Head Analysis: Medallion Financial Corp. (MFIN) & On Deck Capital (NYSE:ONDK)
Medallion Financial Corp. (NASDAQ: MFIN) and On Deck Capital (NYSE:ONDK) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, dividends, risk, valuation, profitabiliy and analyst recommendations.
Institutional and Insider Ownership
17.9% of Medallion Financial Corp. shares are held by institutional investors. Comparatively, 58.4% of On Deck Capital shares are held by institutional investors. 16.2% of Medallion Financial Corp. shares are held by insiders. Comparatively, 25.4% of On Deck Capital 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.
This table compares Medallion Financial Corp. and On Deck Capital’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Medallion Financial Corp.||85.80%||-0.83%||-0.34%|
|On Deck Capital||-25.33%||-28.89%||-7.99%|
Valuation & Earnings
This table compares Medallion Financial Corp. and On Deck Capital’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Medallion Financial Corp.||$20.59 million||2.92||$17.70 million||$0.74||3.39|
|On Deck Capital||$150.16 million||2.41||-$81.91 million||($1.13)||-4.42|
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.
Risk & Volatility
Medallion Financial Corp. has a beta of 1.68, meaning that its stock price is 68% more volatile than the S&P 500. Comparatively, On Deck Capital has a beta of 2.39, meaning that its stock price is 139% more volatile than the S&P 500.
This is a summary of recent ratings and recommmendations for Medallion Financial Corp. and On Deck Capital, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Medallion Financial Corp.||0||2||0||0||2.00|
|On Deck Capital||0||10||1||0||2.09|
Medallion Financial Corp. presently has a consensus target price of $7.25, suggesting a potential upside of 188.84%. On Deck Capital has a consensus target price of $5.73, suggesting a potential upside of 14.63%. Given Medallion Financial Corp.’s higher possible upside, equities analysts clearly believe Medallion Financial Corp. is more favorable than On Deck Capital.
Medallion Financial Corp. beats On Deck Capital on 7 of the 13 factors compared between the two stocks.
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.
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.
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