Garrison Capital (NASDAQ:GARS) and Mentor Capital (OTCMKTS:MNTR) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, valuation, profitability, analyst recommendations, dividends, earnings and institutional ownership.

Dividends

Garrison Capital pays an annual dividend of $0.92 per share and has a dividend yield of 12.2%. Mentor Capital does not pay a dividend. Garrison Capital pays out 91.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Risk & Volatility

Garrison Capital has a beta of 0.68, meaning that its share price is 32% less volatile than the S&P 500. Comparatively, Mentor Capital has a beta of 3.12, meaning that its share price is 212% more volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Garrison Capital -4.06% 9.02% 3.57%
Mentor Capital 0.46% 0.29% 0.24%

Earnings and Valuation

This table compares Garrison Capital and Mentor Capital’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Garrison Capital $38.78 million 3.12 -$1.57 million $1.01 7.47
Mentor Capital $3.18 million 3.19 -$750,000.00 N/A N/A

Mentor Capital has lower revenue, but higher earnings than Garrison Capital.

Analyst Recommendations

This is a summary of current ratings and price targets for Garrison Capital and Mentor Capital, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Garrison Capital 0 0 2 0 3.00
Mentor Capital 0 0 0 0 N/A

Garrison Capital presently has a consensus price target of $11.00, indicating a potential upside of 45.89%. Given Garrison Capital’s higher probable upside, research analysts clearly believe Garrison Capital is more favorable than Mentor Capital.

Institutional & Insider Ownership

26.7% of Garrison Capital shares are owned by institutional investors. Comparatively, 0.0% of Mentor Capital shares are owned by institutional investors. 6.4% of Garrison Capital shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

Garrison Capital beats Mentor Capital on 8 of the 13 factors compared between the two stocks.

About Garrison Capital

Garrison Capital Inc. is a business development company specializing in investments primarily in the debt and equity of middle market companies. It seeks to invest in first lien senior secured loans, second lien senior secured loans, “one-stop” senior secured or “unitranche” loans, subordinated or mezzanine loans, unsecured consumer loans and to a lesser extent, selected equity co-investments in middle-market companies, warrants and minority equity securities in United States middle-market companies. The fund focuses on consumer loans, capital market activities, traditional direct lending but at times may purchase loans in the secondary market or make special situation investments. It seeks to invest between $5 million and $25 million in equity and between $10 million and $25 million in debt per transaction primarily in debt securities and loans with annual EBITDA between $5 million and $30 million, annual revenue between $50 million and $200 million. Its investments typically range in maturity from one to six years.

About Mentor Capital

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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