Head to Head Analysis: Trinity Capital (NASDAQ:TRIN) versus StepStone Group (NASDAQ:STEP)

StepStone Group (NASDAQ:STEP) and Trinity Capital (NASDAQ:TRIN) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, valuation, analyst recommendations, dividends, institutional ownership, risk and earnings.

Earnings & Valuation

This table compares StepStone Group and Trinity Capital”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
StepStone Group	$1.99 billion	2.58	-$535.81 million	($7.72)	-5.59
Trinity Capital	$216.31 million	7.76	$135.60 million	$1.75	10.13

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

Analyst Ratings

This is a breakdown of recent ratings and price targets for StepStone Group and Trinity Capital, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
StepStone Group	1	2	7	0	2.60
Trinity Capital	1	1	4	1	2.71

StepStone Group currently has a consensus target price of $69.00, indicating a potential upside of 59.91%. Trinity Capital has a consensus target price of $16.67, indicating a potential downside of 6.02%. Given StepStone Group’s higher probable upside, equities analysts plainly believe StepStone Group is more favorable than Trinity Capital.

Dividends

StepStone Group pays an annual dividend of $1.32 per share and has a dividend yield of 3.1%. Trinity Capital pays an annual dividend of $2.04 per share and has a dividend yield of 11.5%. StepStone Group pays out -17.1% of its earnings in the form of a dividend. Trinity Capital pays out 116.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. StepStone Group has raised its dividend for 3 consecutive years and Trinity Capital has raised its dividend for 1 consecutive years.

Insider and Institutional Ownership

55.5% of StepStone Group shares are owned by institutional investors. Comparatively, 24.6% of Trinity Capital shares are owned by institutional investors. 15.7% of StepStone Group shares are owned by insiders. Comparatively, 4.3% of Trinity Capital shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
StepStone Group	-30.53%	43.38%	4.40%
Trinity Capital	43.45%	14.94%	6.69%

Volatility & Risk

StepStone Group has a beta of 1.29, meaning that its share price is 29% more volatile than the S&P 500. Comparatively, Trinity Capital has a beta of 0.61, meaning that its share price is 39% less volatile than the S&P 500.

About StepStone Group

StepStone Group Inc. is a private equity and venture capital firm specializing in direct, fund of funds, secondary direct, and secondary indirect investments. For direct investment, it seeks to invest in private debt, venture debt, incubation, mezzanine, distressed/vulture, seed/startup, early venture, mid venture, late venture, emerging growth, later stage, turnaround, growth capital, industry consolidation, recapitalization, buyout investments in mature and middle market companies. It prefers to invest in natural resources, technology, healthcare, services, materials, manufacturing, consumer durables, apparel, hotels, restaurants and leisure, media, retailing, power, utilities consumer staples, financials, telecommunication services, clean energy/renewables, transport, social, natural capital, infrastructure, corporate, real estate, credit and real asset. The firm invests globally with a focus on United States, North America, Europe, Asia, Latin America, Middle East, Africa, Brazil, Mexico, Argentina, Colombia, New Zealand, China, India, Korea, Japan, Taiwan, and Australia region. The firm invests between 5% and 40% in emerging markets. For fund of fund investment, it seeks to invest in private equity funds, venture capital funds, Special situation funds, Real estate funds, Infrastructure funds, mezzanine funds, and turnaround/distressed funds. It considers investments in both domestic and international funds. It also seeks to make co-investments and follow-on investments and considers partial interests in funds. StepStone Group Inc. was founded in 2007 and is based in New York, New York with additional offices across North America, South America, Europe, Australia and Asia.

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.