Carlyle Group (NASDAQ:CG – Get Free Report) and Portman Ridge Finance (NASDAQ:PTMN – Get Free Report) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their earnings, analyst recommendations, valuation, institutional ownership, dividends, profitability and risk.
Risk and Volatility
Carlyle Group has a beta of 2.05, meaning that its stock price is 105% more volatile than the S&P 500. Comparatively, Portman Ridge Finance has a beta of 0.6, meaning that its stock price is 40% less volatile than the S&P 500.
Analyst Recommendations
This is a breakdown of recent ratings for Carlyle Group and Portman Ridge Finance, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Carlyle Group | 1 | 8 | 7 | 0 | 2.38 |
| Portman Ridge Finance | 0 | 1 | 0 | 0 | 2.00 |
Dividends
Carlyle Group pays an annual dividend of $1.40 per share and has a dividend yield of 2.4%. Portman Ridge Finance pays an annual dividend of $1.88 per share and has a dividend yield of 15.6%. Carlyle Group pays out 78.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Portman Ridge Finance pays out -202.2% of its earnings in the form of a dividend. Carlyle Group has raised its dividend for 4 consecutive years. Portman Ridge Finance is clearly the better dividend stock, given its higher yield and lower payout ratio.
Profitability
This table compares Carlyle Group and Portman Ridge Finance’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Carlyle Group | 16.91% | 23.46% | 6.21% |
| Portman Ridge Finance | -15.92% | 11.49% | 4.54% |
Insider and Institutional Ownership
55.9% of Carlyle Group shares are owned by institutional investors. Comparatively, 30.1% of Portman Ridge Finance shares are owned by institutional investors. 26.3% of Carlyle Group shares are owned by company insiders. Comparatively, 2.1% of Portman Ridge Finance shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Valuation and Earnings
This table compares Carlyle Group and Portman Ridge Finance”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Carlyle Group | $2.99 billion | 6.96 | $1.02 billion | $1.79 | 32.23 |
| Portman Ridge Finance | -$2.85 million | -55.74 | -$5.93 million | ($0.93) | -12.92 |
Carlyle Group has higher revenue and earnings than Portman Ridge Finance. Portman Ridge Finance is trading at a lower price-to-earnings ratio than Carlyle Group, indicating that it is currently the more affordable of the two stocks.
Summary
Carlyle Group beats Portman Ridge Finance on 15 of the 17 factors compared between the two stocks.
About Carlyle Group
The Carlyle Group Inc. is an investment firm specializing in direct and fund of fund investments. Within direct investments, it specializes in management-led/ Leveraged buyouts, privatizations, divestitures, strategic minority equity investments, structured credit, global distressed and corporate opportunities, small and middle market, equity private placements, consolidations and buildups, senior debt, mezzanine and leveraged finance, and venture and growth capital financings, seed/startup, early venture, emerging growth, turnaround, mid venture, late venture, PIPES. The firm invests across four segments which include Corporate Private Equity, Real Assets, Global Market Strategies, and Solutions. The firm typically invests in industrial, agribusiness, ecological sector, fintech, airports, parking, Plastics, Rubber, diversified natural resources, minerals, farming, aerospace, defense, automotive, consumer, retail, industrial, infrastructure, energy, power, healthcare, software, software enabled services, semiconductors, communications infrastructure, financial technology, utilities, gaming, systems and related supply chain, electronic systems, systems, oil and gas, processing facilities, power generation assets, technology, systems, real estate, financial services, transportation, business services, telecommunications, media, and logistics sectors. Within the industrial sector, the firm invests in manufacturing, building products, packaging, chemicals, metals and mining, forestry and paper products, and industrial consumables and services. In consumer and retail sectors, it invests in food and beverage, retail, restaurants, consumer products, domestic consumption, consumer services, personal care products, direct marketing, and education. Within aerospace, defense, business services, and government services sectors, it seeks to invest in defense electronics, manufacturing and services, government contracting and services, information technology, distribution companies. In telecommunication and media sectors, it invests in cable TV, directories, publishing, entertainment and content delivery services, wireless infrastructure/services, fixed line networks, satellite services, broadband and Internet, and infrastructure. Within real estate, the firm invests in office, hotel, industrial, retail, for sale residential, student housing, hospitality, multifamily residential, homebuilding and building products, and senior living sectors. The firm seeks to make investments in growing business including those with overleveraged balance sheets. The firm seeks to hold its investments for four to six years. In the healthcare sector, it invests in healthcare services, outsourcing services, companies running clinical trials for pharmaceutical companies, managed care, pharmaceuticals, pharmaceutical related services, healthcare IT, medical, products, and devices. It seeks to invest in companies based in Sub-Saharan focusing on Ghana, Kenya, Mozambique, Botswana, Nigeria, Uganda, West Africa, North Africa and South Africa focusing on Tanzania and Zambia; Asia focusing on Pakistan, India, South East Asia, Indonesia, Philippines, Vietnam, Korea, and Japan; Australia; New Zealand; Europe focusing on France, Italy, Denmark, United Kingdom, Germany, Austria, Belgium, Finland, Iceland, Ireland, Netherlands, Norway, Portugal, Spain, Benelux , Sweden, Switzerland, Hungary, Poland, and Russia; Middle East focusing on Bahrain, Jordan, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia, Turkey, and UAE; North America focusing on United States which further invest in Southeastern United States, Texas, Boston, San Francisco Bay Area and Pacific Northwest; Asia Pacific; Soviet Union, Central-Eastern Europe, and Israel; Nordic region; and South America focusing on Mexico, Argentina, Brazil, Chile, and Peru. The firm seeks to invest in food, financial, and healthcare industries in Western China. In the real estate sector, the firm seeks to invest in various locations across Europe focusing on France and Central Europe, United States, Asia focusing on China, and Latin America. It typically invests between $1 million and $50 million for venture investments and between $50 million and $2 billion for buyouts in companies with enterprise value of between $31.57 million and $1000 million and sales value of $10 million and $500 million. It seeks to invest in companies with market capitalization greater than $50 million and EBITDA between $5 million to $25 million. It prefers to take a majority or a minority stake. While investing in Japan, it does not invest in companies with more than 1,000 employees and prefers companies' worth between $100 million and $150 million. The firm originates, structures, and acts as lead equity investor in the transactions. The Carlyle Group Inc. was founded in 1987 and is based in Washington, District of Columbia with additional offices in 21 countries across 5 continents (North America, South America, Asia, Australia and Europe).
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.
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