Garrison Capital (NASDAQ: GARS) and Noah Holdings (NYSE:NOAH) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, risk, institutional ownership, profitability, earnings, dividends and valuation.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Garrison Capital and Noah Holdings, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Garrison Capital 0 5 1 0 2.17
Noah Holdings 0 0 1 0 3.00

Garrison Capital presently has a consensus price target of $10.17, indicating a potential upside of 21.32%. Noah Holdings has a consensus price target of $29.00, indicating a potential downside of 23.80%. Given Garrison Capital’s higher possible upside, equities analysts plainly believe Garrison Capital is more favorable than Noah Holdings.

Risk and Volatility

Garrison Capital has a beta of 0.24, suggesting that its stock price is 76% less volatile than the S&P 500. Comparatively, Noah Holdings has a beta of 2.44, suggesting that its stock price is 144% more volatile than the S&P 500.

Profitability

This table compares Garrison Capital and Noah Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Garrison Capital -0.38% 8.33% 3.97%
Noah Holdings 29.39% 18.42% 11.94%

Valuation & Earnings

This table compares Garrison Capital and Noah Holdings’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Garrison Capital N/A N/A N/A N/A N/A
Noah Holdings $409.59 million 5.25 $122.75 million $1.73 22.00

Noah Holdings has higher revenue and earnings than Garrison Capital.

Insider & Institutional Ownership

22.0% of Garrison Capital shares are owned by institutional investors. Comparatively, 41.5% of Noah Holdings shares are owned by institutional investors. 5.8% of Garrison Capital shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dividends

Garrison Capital pays an annual dividend of $1.12 per share and has a dividend yield of 13.4%. Noah Holdings does not pay a dividend.

Summary

Noah Holdings beats Garrison Capital on 7 of the 10 factors compared between the two stocks.

Garrison Capital Company Profile

Garrison Capital Inc. is a managed, closed-end, non-diversified management investment company. The Company’s investment objective is to generate current income and capital appreciation by making investments primarily in debt securities and loans of the United States-based middle-market companies, which it defines as those having annual earnings before interest, taxes and depreciation, or EBITDA, of certain amount. It invests or provides direct lending in first lien senior secured loans, second lien senior secured loans, one-stop senior secured loans or unitranche loans, subordinated or mezzanine loans, unsecured consumer loans and to a lesser extent, selected equity co-investments in middle-market companies. The Company intends to generate risk-adjusted net returns by assembling a portfolio of investments. The Company’s investment advisor is Garrison Capital Advisers LLC.

Noah Holdings Company Profile

Noah Holdings Limited is a wealth management service provider with a focus on global wealth investment and asset allocation services for high net worth individuals and enterprises in China. The Company operates through three segments: wealth management, asset management and Internet finance. It also provides Internet finance services to clients in China. It provides direct access to China’s high net worth population. With approximately 1,100 relationship managers in over 130 branch offices, its coverage network includes China’s regions where high net worth population is concentrated, including the Yangtze River Delta, the Pearl River Delta, the Bohai Rim and other regions. Its product offerings consist primarily of over-the-counter (OTC) wealth management and OTC asset management products, mutual fund products and asset management plans originated in China and designed to cater to the needs of China’s high net worth population.

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