Head-To-Head Review: Barings Participation Investors (NYSE:MPV) versus Portman Ridge Finance (NASDAQ:PTMN)

Portman Ridge Finance (NASDAQ:PTMN) and Barings Participation Investors (NYSE:MPV) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their risk, dividends, profitability, valuation, institutional ownership, analyst recommendations and earnings.

Dividends

Portman Ridge Finance pays an annual dividend of $1.88 per share and has a dividend yield of 15.7%. Barings Participation Investors pays an annual dividend of $1.48 per share and has a dividend yield of 8.2%. Portman Ridge Finance pays out -202.2% of its earnings in the form of a dividend.

Profitability

This table compares Portman Ridge Finance and Barings Participation Investors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Portman Ridge Finance	-15.92%	11.49%	4.54%
Barings Participation Investors	N/A	N/A	N/A

Analyst Recommendations

This is a breakdown of current ratings for Portman Ridge Finance and Barings Participation Investors, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Portman Ridge Finance	0	1	0	0	2.00
Barings Participation Investors	0	0	0	0	0.00

Portman Ridge Finance currently has a consensus target price of $14.00, suggesting a potential upside of 17.15%. Given Portman Ridge Finance’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Portman Ridge Finance is more favorable than Barings Participation Investors.

Institutional and Insider Ownership

30.1% of Portman Ridge Finance shares are held by institutional investors. 2.1% of Portman Ridge Finance shares are held by insiders. Comparatively, 1.4% of Barings Participation Investors shares are held 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.

Valuation and Earnings

This table compares Portman Ridge Finance and Barings Participation Investors”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Portman Ridge Finance	-$2.85 million	-55.41	-$5.93 million	($0.93)	-12.85
Barings Participation Investors	N/A	N/A	N/A	N/A	N/A

Barings Participation Investors has higher revenue and earnings than Portman Ridge Finance.

Risk & Volatility

Portman Ridge Finance has a beta of 0.6, indicating that its share price is 40% less volatile than the S&P 500. Comparatively, Barings Participation Investors has a beta of 0.45, indicating that its share price is 55% less volatile than the S&P 500.

Summary

Portman Ridge Finance beats Barings Participation Investors on 9 of the 11 factors compared between the two stocks.

About Portman Ridge Finance

Portman Ridge Finance Corporation is a business development company specializing in investments in unitranche loans (including last out), first lien loans, second lien loans, subordinated debt, equity co-investment, mezzanine, buyout in middle market companies. It also makes acquisitions in businesses complementary to the firm's business. It primarily invests in healthcare, cargo transport, manufacturing, industrial & environmental services, logistics & distribution, media & telecommunications, real estate, education, automotive, agriculture, aerospace/defense, packaging, electronics, finance, non-durable consumer, consumer products, business services, utilities, insurance, and food and beverage sectors. The fund typically invests $1 million to $20 million in its portfolio companies. It provides senior secured term loans from $2 million to $20 million maturing in five to seven years; second lien term loans from $5 million to $15 million maturing in six to eight years; senior unsecured loans $5 million to $23 million maturing in six to eight years; mezzanine loans from $5 million to $15 million maturing in seven to ten years; and equity investments from $1 to $5 million. The fund targets the companies with EBITDA between $5 million and $25 million. While investing in debt securities, it invests in those middle market firms with EBITDA between $10 million and $50 million and/or total debt between $25 million and $150 million. It invests in minority, and majority or control equity positions alongside its private equity sponsor partners.

About Barings Participation Investors

Barings Participation Investors is a closed ended fixed income mutual fund launched and managed by Barings LLC. The fund invests in the fixed income markets of the United States. It primarily invests in below-investment grade, long-term corporate debt obligations which are directly purchased from its issuers. The fund also seeks to invest in warrants, conversion rights, or other equity related instruments. It benchmarks the performance of its portfolio against Standard and Poor's Industrials Composite, Russell 2000 Index, Lehman Brothers U.S. High Yield Index, and Lehman Brothers Intermediate U.S. Credit Index. The fund was formerly known as Babson Capital Participation Investors. Barings Participation Investors was formed on April 7, 1988 and is domiciled in the United States.