Critical Review: Portman Ridge Finance (NASDAQ:PTMN) versus Silvercrest Asset Management Group (NASDAQ:SAMG)

Portman Ridge Finance (NASDAQ:PTMN) and Silvercrest Asset Management Group (NASDAQ:SAMG) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, valuation, risk, dividends, profitability and analyst recommendations.

Profitability

This table compares Portman Ridge Finance and Silvercrest Asset Management Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Portman Ridge Finance	-15.92%	11.49%	4.54%
Silvercrest Asset Management Group	2.12%	10.51%	6.18%

Institutional & Insider Ownership

30.1% of Portman Ridge Finance shares are owned by institutional investors. Comparatively, 47.6% of Silvercrest Asset Management Group shares are owned by institutional investors. 2.1% of Portman Ridge Finance shares are owned by insiders. Comparatively, 20.4% of Silvercrest Asset Management Group shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Portman Ridge Finance and Silvercrest Asset Management Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Portman Ridge Finance	0	0	0	0	0.00
Silvercrest Asset Management Group	1	1	0	0	1.50

Valuation and Earnings

This table compares Portman Ridge Finance and Silvercrest Asset Management Group”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Portman Ridge Finance	-$2.85 million	-35.29	-$5.93 million	($0.93)	-8.18
Silvercrest Asset Management Group	$125.32 million	1.07	$4.89 million	$0.30	37.77

Silvercrest Asset Management Group has higher revenue and earnings than Portman Ridge Finance. Portman Ridge Finance is trading at a lower price-to-earnings ratio than Silvercrest Asset Management Group, indicating that it is currently the more affordable of the two stocks.

Dividends

Portman Ridge Finance pays an annual dividend of $1.88 per share and has a dividend yield of 24.7%. Silvercrest Asset Management Group pays an annual dividend of $0.84 per share and has a dividend yield of 7.4%. Portman Ridge Finance pays out -202.2% of its earnings in the form of a dividend. Silvercrest Asset Management Group pays out 280.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Silvercrest Asset Management Group has increased its dividend for 1 consecutive years. Portman Ridge Finance is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk & Volatility

Portman Ridge Finance has a beta of 0.6, indicating that its share price is 40% less volatile than the S&P 500. Comparatively, Silvercrest Asset Management Group has a beta of 0.69, indicating that its share price is 31% less volatile than the S&P 500.

Summary

Silvercrest Asset Management Group beats Portman Ridge Finance on 12 of the 15 factors compared between the two stocks.

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.

About Silvercrest Asset Management Group

Silvercrest Asset Management Group Inc., a wealth management firm, provides financial advisory and related family office services in the United States. The company serves ultra-high net worth individuals and families, as well as their trusts; endowments; foundations; and other institutional investors. It also manages funds of funds and other investment funds. The company was founded in 2002 and is headquartered in New York, New York.