Critical Comparison: Sound Point Meridian Capital (NYSE:SPMC) & MarketWise (NASDAQ:MKTW)

MarketWise (NASDAQ:MKTW) and Sound Point Meridian Capital (NYSE:SPMC) are both small-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, risk, dividends, valuation, analyst recommendations, profitability and earnings.

Institutional & Insider Ownership

23.0% of MarketWise shares are held by institutional investors. 30.0% of MarketWise shares are held by insiders. Comparatively, 0.9% of Sound Point Meridian Capital shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Dividends

MarketWise pays an annual dividend of $1.80 per share and has a dividend yield of 8.6%. Sound Point Meridian Capital pays an annual dividend of $1.56 per share and has a dividend yield of 24.7%. MarketWise pays out 204.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Sound Point Meridian Capital pays out -27.0% of its earnings in the form of a dividend. MarketWise has raised its dividend for 1 consecutive years. Sound Point Meridian Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk and Volatility

MarketWise has a beta of 0.21, meaning that its stock price is 79% less volatile than the S&P 500. Comparatively, Sound Point Meridian Capital has a beta of 1.2, meaning that its stock price is 20% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations and price targets for MarketWise and Sound Point Meridian Capital, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MarketWise	0	1	1	0	2.50
Sound Point Meridian Capital	0	2	1	1	2.75

Sound Point Meridian Capital has a consensus target price of $15.12, suggesting a potential upside of 139.13%. Given Sound Point Meridian Capital’s stronger consensus rating and higher possible upside, analysts clearly believe Sound Point Meridian Capital is more favorable than MarketWise.

Profitability

This table compares MarketWise and Sound Point Meridian Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MarketWise	0.70%	-0.96%	1.10%
Sound Point Meridian Capital	N/A	N/A	N/A

Valuation and Earnings

This table compares MarketWise and Sound Point Meridian Capital”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MarketWise	$317.50 million	1.04	$5.62 million	$0.88	23.69
Sound Point Meridian Capital	-$121.96 million	-1.06	-$118.47 million	($5.78)	-1.09

MarketWise has higher revenue and earnings than Sound Point Meridian Capital. Sound Point Meridian Capital is trading at a lower price-to-earnings ratio than MarketWise, indicating that it is currently the more affordable of the two stocks.

Summary

MarketWise beats Sound Point Meridian Capital on 10 of the 17 factors compared between the two stocks.

About MarketWise

MarketWise, Inc. operates a content and technology multi-brand platform for self-directed investors in the United States and Internationally. Its platform includes subscription businesses that provides financial research, software, education, and tools to navigate the financial markets. The company offers various investment strategies, such as value investing, income, growth, commodities, cryptocurrencies, venture, crowdfunded investing, biotechnology, mutual funds, options, and trading; investment research product portfolio through a range of media, including desktops, laptops, tablets, and mobile; and financial newsletters. It provides a suite of stock research tools and portfolio management services under the Chaikin Analytics brand; portfolio management software tools under the TradeSmith brand name; and database of accounting-based financial summaries under the Altimetry brand. In addition, the company develops screeners, monitors, portfolio management tools, and proprietary indicators that produce a composite score to rank publicly traded companies. The company was founded in 1999 and is headquartered in Baltimore, Maryland.

About Sound Point Meridian Capital

Sound Point Meridian Capital Inc. is an externally managed, non-diversified closed-end management investment company. Its investment objective is to generate high current income, with a secondary objective to generate capital appreciation, by investing primarily in third-party collateralized loan obligation equity and mezzanine tranches. Sound Point Meridian Capital Inc. is based in NEW YORK.