Analyzing TriplePoint Venture Growth BDC (NYSE:TPVG) and Fidus Investment (NASDAQ:FDUS)

TriplePoint Venture Growth BDC (NYSE:TPVG) and Fidus Investment (NASDAQ:FDUS) are both small-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, analyst recommendations, profitability, dividends, institutional ownership, risk and earnings.

Earnings & Valuation

This table compares TriplePoint Venture Growth BDC and Fidus Investment”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TriplePoint Venture Growth BDC	$90.93 million	2.47	$49.21 million	$1.06	5.23
Fidus Investment	$155.87 million	4.60	$82.40 million	$2.28	8.28

Fidus Investment has higher revenue and earnings than TriplePoint Venture Growth BDC. TriplePoint Venture Growth BDC is trading at a lower price-to-earnings ratio than Fidus Investment, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

TriplePoint Venture Growth BDC has a beta of 1.28, meaning that its share price is 28% more volatile than the S&P 500. Comparatively, Fidus Investment has a beta of 0.69, meaning that its share price is 31% less volatile than the S&P 500.

Institutional and Insider Ownership

12.8% of TriplePoint Venture Growth BDC shares are owned by institutional investors. Comparatively, 28.1% of Fidus Investment shares are owned by institutional investors. 1.6% of TriplePoint Venture Growth BDC shares are owned by company insiders. Comparatively, 0.9% of Fidus Investment shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Dividends

TriplePoint Venture Growth BDC pays an annual dividend of $0.92 per share and has a dividend yield of 16.6%. Fidus Investment pays an annual dividend of $1.72 per share and has a dividend yield of 9.1%. TriplePoint Venture Growth BDC pays out 86.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Fidus Investment pays out 75.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares TriplePoint Venture Growth BDC and Fidus Investment’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TriplePoint Venture Growth BDC	46.77%	11.54%	4.97%
Fidus Investment	49.51%	11.19%	5.97%

Analyst Ratings

This is a summary of current ratings and recommmendations for TriplePoint Venture Growth BDC and Fidus Investment, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TriplePoint Venture Growth BDC	2	4	0	0	1.67
Fidus Investment	0	2	1	1	2.75

TriplePoint Venture Growth BDC presently has a consensus target price of $5.63, suggesting a potential upside of 1.52%. Fidus Investment has a consensus target price of $21.00, suggesting a potential upside of 11.23%. Given Fidus Investment’s stronger consensus rating and higher probable upside, analysts plainly believe Fidus Investment is more favorable than TriplePoint Venture Growth BDC.

Summary

Fidus Investment beats TriplePoint Venture Growth BDC on 13 of the 17 factors compared between the two stocks.

About TriplePoint Venture Growth BDC

TriplePoint Venture Growth BDC Corp. is a business development company specializing investments in venture capital-backed companies at the growth stage investments. It also provides debt financing to venture growth space companies which includes growth capital loans, secured and customized loans, equipment financings, revolving loans and direct equity investments. The fund seeks to invest in e-commerce, entertainment, technology and life sciences sector. Within technology the areas of focus include: Security, wireless communication equipments, network system and software, business applications software, conferencing equipments/services .big data, cloud computing, data storage, electronics, energy efficiency, hardware, information services, internet and media, networking, semiconductors, software, software as a service, and other technology related subsectors and within life sciences the areas of focus include: biotechnology, bio fuels/bio mass, diagnostic testing and bioinformatics, drug delivery, drug discovery, healthcare information systems, healthcare services, medical, surgical and therapeutic devices, pharmaceuticals and other life science related subsectors. Within growth capital loans it invests between $5 million and $50 million, for equipment financings it invests between $5 million and $25 million, for revolving loans it invests between $1 million and $25 million, and for direct equity investments it may invest between $0.1 million and $5 million (generally not exceeding 5% of the company’s total equity). The debt financing products are typically structured as lines of credit and it invests through warrants and secured loans. It targeted returns between 10% and 18%. It does not take board seat in the company.

About Fidus Investment

Fidus Investment Corporation is a business development company. It specializing in leveraged buyouts, refinancings, change of ownership transactions, recapitalizations, strategic acquisitions, mezzanine, growth capital, business expansion, lower middle market investments, debt investments, subordinated and second lien loans, senior secured and unitranche debt, preferred equity, warrants, subordinated debt, senior subordinated notes, junior secured loans, and unitranche loans. It does not invest in turnarounds or distressed situations. The fund prefers to invest in aerospace and defense, business services, consumer products and services including retail, food, and beverage, healthcare products and services, industrial products and services, information technology services, niche manufacturing, transportation and logistics, and value-added distribution sectors. It seeks to invest in companies based in United States. The fund typically invests between $5 million and $15 million per transaction in companies with annual revenues between $10 million and $150 million and an annual EBITDA between $3 million and $20 million, but it can occasionally invest in larger or smaller companies. It seeks to acquire minority equity stakes and board observation rights in conjunction with its investments.