Chicago Atlantic BDC (NASDAQ:LIEN – Get Free Report) and Horizon Technology Finance (NASDAQ:HRZN – Get Free Report) are both small-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, risk, profitability, institutional ownership, valuation, earnings and analyst recommendations.
Volatility and Risk
Chicago Atlantic BDC has a beta of 0.26, meaning that its share price is 74% less volatile than the S&P 500. Comparatively, Horizon Technology Finance has a beta of 0.98, meaning that its share price is 2% less volatile than the S&P 500.
Valuation & Earnings
This table compares Chicago Atlantic BDC and Horizon Technology Finance”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Chicago Atlantic BDC | $21.67 million | 10.92 | $9.62 million | $0.79 | 13.13 |
| Horizon Technology Finance | $99.92 million | 2.97 | -$5.63 million | ($0.67) | -9.99 |
Chicago Atlantic BDC has higher earnings, but lower revenue than Horizon Technology Finance. Horizon Technology Finance is trading at a lower price-to-earnings ratio than Chicago Atlantic BDC, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a breakdown of recent ratings for Chicago Atlantic BDC and Horizon Technology Finance, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Chicago Atlantic BDC | 0 | 3 | 0 | 0 | 2.00 |
| Horizon Technology Finance | 3 | 2 | 1 | 0 | 1.67 |
Horizon Technology Finance has a consensus target price of $7.00, indicating a potential upside of 4.63%. Given Horizon Technology Finance’s higher possible upside, analysts clearly believe Horizon Technology Finance is more favorable than Chicago Atlantic BDC.
Dividends
Chicago Atlantic BDC pays an annual dividend of $1.36 per share and has a dividend yield of 13.1%. Horizon Technology Finance pays an annual dividend of $1.32 per share and has a dividend yield of 19.7%. Chicago Atlantic BDC pays out 172.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Horizon Technology Finance pays out -197.0% of its earnings in the form of a dividend. Horizon Technology Finance is clearly the better dividend stock, given its higher yield and lower payout ratio.
Insider & Institutional Ownership
4.4% of Chicago Atlantic BDC shares are owned by institutional investors. Comparatively, 4.9% of Horizon Technology Finance shares are owned by institutional investors. 16.9% of Chicago Atlantic BDC shares are owned by insiders. Comparatively, 1.3% of Horizon Technology Finance 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.
Profitability
This table compares Chicago Atlantic BDC and Horizon Technology Finance’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Chicago Atlantic BDC | 33.72% | 5.80% | 5.46% |
| Horizon Technology Finance | -24.19% | 15.01% | 6.02% |
Summary
Horizon Technology Finance beats Chicago Atlantic BDC on 9 of the 16 factors compared between the two stocks.
About Chicago Atlantic BDC
Chicago Atlantic BDC Inc. is a specialty finance company which has elected to be regulated as a business development company. Its investment objective is to maximize risk-adjusted returns on equity for its stockholders by investing primarily in direct loans to privately held middle-market companies, with a primary focus on cannabis companies. Chicago Atlantic BDC Inc., formerly known as CHICAGO ATLNTIC, is based in NEW YORK.
About Horizon Technology Finance
Horizon Technology Finance Corporation is a business development company specializing in lending and and investing in development-stage investments. It focuses on making secured debt and venture lending investments to venture capital backed companies in the technology, life science, healthcare information and services, cleantech and sustainability industries. It seeks to invest in companies in the United States.
Receive News & Ratings for Chicago Atlantic BDC Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Chicago Atlantic BDC and related companies with MarketBeat.com's FREE daily email newsletter.
