Head-To-Head Analysis: Rand Capital (NASDAQ:RAND) vs. Ridgepost Capital (NYSE:RPC)

Rand Capital (NASDAQ:RAND) and Ridgepost Capital (NYSE:RPC) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, risk, analyst recommendations, institutional ownership, profitability, valuation and earnings.

Volatility & Risk

Rand Capital has a beta of 0.11, indicating that its stock price is 89% less volatile than the S&P 500. Comparatively, Ridgepost Capital has a beta of 0.87, indicating that its stock price is 13% less volatile than the S&P 500.

Insider & Institutional Ownership

48.0% of Ridgepost Capital shares are held by institutional investors. 68.2% of Rand Capital shares are held by company insiders. Comparatively, 11.8% of Ridgepost Capital shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Rand Capital and Ridgepost Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Rand Capital	-2.67%	5.47%	5.23%
Ridgepost Capital	9.03%	21.02%	9.21%

Dividends

Rand Capital pays an annual dividend of $1.16 per share and has a dividend yield of 10.9%. Ridgepost Capital pays an annual dividend of $0.16 per share and has a dividend yield of 2.0%. Rand Capital pays out -2,900.0% of its earnings in the form of a dividend. Ridgepost Capital pays out 64.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Rand Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation and Earnings

This table compares Rand Capital and Ridgepost Capital”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rand Capital	$1.58 million	20.04	-$8.04 million	($0.04)	-266.25
Ridgepost Capital	$297.35 million	2.94	$19.50 million	$0.25	31.68

Ridgepost Capital has higher revenue and earnings than Rand Capital. Rand Capital is trading at a lower price-to-earnings ratio than Ridgepost Capital, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current recommendations for Rand Capital and Ridgepost Capital, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rand Capital	1	0	0	0	1.00
Ridgepost Capital	0	2	2	0	2.50

Ridgepost Capital has a consensus target price of $13.00, indicating a potential upside of 64.14%. Given Ridgepost Capital’s stronger consensus rating and higher possible upside, analysts plainly believe Ridgepost Capital is more favorable than Rand Capital.

Summary

Ridgepost Capital beats Rand Capital on 12 of the 16 factors compared between the two stocks.

About Rand Capital

Rand Capital Corporation is a business development company specializing in subordinated debt with warrants or preferred equity and venture capital investments. Within private equity, the firm specializing in capital growth and lower middle market investments. Within venture capital, it specializing in early to late-stage private businesses. It does not prefer to invest in real estate sector. It prefers to invest in software, professional services, manufacturing, consumer, healthcare, automotive and public d stocks. It prefers to invest in East or Midwest U.S. operations sectors. It typically invests between $0.75 million and $5 million with initial target size of $1.5 million. It seeks to invest in companies having more than $2 million in revenue or having excess of $1.5 million and up to $5 million in EBITDA. It prefers to be a minority stake and seeks to take a Board seat in its portfolio companies. It typically holds its investments for a period up to five years.

About Ridgepost Capital

P10, Inc., together with its subsidiaries, operates as a multi-asset class private market solutions provider in the alternative asset management industry in the United States. The company offers private equity, venture capital, private credit, impact investing, and private credit services, as well as primary fund of funds, secondary investment, and direct and co-investments services. It also provides tax credit transaction and consulting services. The company was founded in 1992 and is headquartered in Dallas, Texas.