Critical Comparison: Amalgamated Financial (NASDAQ:AMAL) and Trinity Capital (NASDAQ:TRIN)

Amalgamated Financial (NASDAQ:AMAL) and Trinity Capital (NASDAQ:TRIN) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, risk, valuation, dividends and analyst recommendations.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Amalgamated Financial and Trinity Capital, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Amalgamated Financial	0	2	1	0	2.33
Trinity Capital	1	1	5	0	2.57

Amalgamated Financial currently has a consensus target price of $33.50, indicating a potential downside of 7.02%. Trinity Capital has a consensus target price of $16.44, indicating a potential downside of 0.56%. Given Trinity Capital’s stronger consensus rating and higher probable upside, analysts clearly believe Trinity Capital is more favorable than Amalgamated Financial.

Volatility and Risk

Amalgamated Financial has a beta of 0.82, meaning that its stock price is 18% less volatile than the S&P 500. Comparatively, Trinity Capital has a beta of 0.53, meaning that its stock price is 47% less volatile than the S&P 500.

Profitability

This table compares Amalgamated Financial and Trinity Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Amalgamated Financial	22.97%	14.75%	1.30%
Trinity Capital	50.49%	15.51%	7.00%

Insider and Institutional Ownership

75.9% of Amalgamated Financial shares are held by institutional investors. Comparatively, 24.6% of Trinity Capital shares are held by institutional investors. 1.3% of Amalgamated Financial shares are held by company insiders. Comparatively, 5.3% of Trinity Capital shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Dividends

Amalgamated Financial pays an annual dividend of $0.56 per share and has a dividend yield of 1.6%. Trinity Capital pays an annual dividend of $2.04 per share and has a dividend yield of 12.3%. Amalgamated Financial pays out 16.9% of its earnings in the form of a dividend. Trinity Capital pays out 93.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Amalgamated Financial has raised its dividend for 4 consecutive years and Trinity Capital has raised its dividend for 1 consecutive years.

Valuation and Earnings

This table compares Amalgamated Financial and Trinity Capital”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Amalgamated Financial	$434.51 million	2.48	$106.43 million	$3.32	10.85
Trinity Capital	$237.69 million	5.26	$115.60 million	$2.19	7.55

Trinity Capital has lower revenue, but higher earnings than Amalgamated Financial. Trinity Capital is trading at a lower price-to-earnings ratio than Amalgamated Financial, indicating that it is currently the more affordable of the two stocks.

Summary

Trinity Capital beats Amalgamated Financial on 10 of the 17 factors compared between the two stocks.

About Amalgamated Financial

Amalgamated Financial Corp. operates as the bank holding company for Amalgamated Bank that provides commercial and retail banking, investment management, and trust and custody services for commercial and retail customers in the United States. The company accepts various deposit products, including non-interest bearing accounts, interest-bearing demand products, savings accounts, money market accounts, NOW accounts, and certificates of deposit. It also provides various commercial loans comprising commercial and industrial, multifamily mortgage, and commercial real estate loans; residential mortgage loans; and retail loans, such as residential real estate, consumer solar, and consumer and other loans. In addition, the company offers online banking, bill payment, online cash management, and safe deposit box rental services; debit and ATM cards; and trust, custody, and investment management services comprising asset safekeeping, corporate actions, income collections, proxy, account transition, asset transfers, and conversion management services. Further, it provides investment products, such as funds spanning equity, fixed-income, real estate, and alternative investment products; and brokerage, asset management, and insurance products. Amalgamated Financial Corp. was founded in 1923 and is headquartered in New York, New York.

About Trinity Capital

Trinity Capital Inc. is a business development company. It is a venture capital firm specializing in venture debt to growth stage companies looking for loans and/or equipment financing. Trinity Capital Inc. was founded in 2019 is based in Phoenix, Arizona with additional offices in the United States.