Head to Head Review: WhiteHorse Finance (WHF) vs. Apollo Investment (AINV)

Apollo Investment (NASDAQ: AINV) and WhiteHorse Finance (NASDAQ:WHF) are both small-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, profitability, analyst recommendations, dividends, valuation, earnings and risk.

Dividends

Apollo Investment pays an annual dividend of $0.60 per share and has a dividend yield of 10.6%. WhiteHorse Finance pays an annual dividend of $1.42 per share and has a dividend yield of 10.1%. Apollo Investment pays out 89.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. WhiteHorse Finance pays out 105.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Apollo Investment is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility & Risk

Apollo Investment has a beta of 0.89, indicating that its share price is 11% less volatile than the S&P 500. Comparatively, WhiteHorse Finance has a beta of 0.63, indicating that its share price is 37% less volatile than the S&P 500.

Institutional & Insider Ownership

49.0% of Apollo Investment shares are owned by institutional investors. Comparatively, 9.3% of WhiteHorse Finance shares are owned by institutional investors. 0.3% of Apollo Investment shares are owned by company insiders. Comparatively, 1.4% of WhiteHorse Finance shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Apollo Investment and WhiteHorse Finance’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Apollo Investment 28.18% 9.45% 5.68%
WhiteHorse Finance 66.87% 9.83% 5.80%

Analyst Ratings

This is a summary of current ratings and target prices for Apollo Investment and WhiteHorse Finance, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Apollo Investment 1 4 5 0 2.40
WhiteHorse Finance 0 2 3 0 2.60

Apollo Investment currently has a consensus target price of $6.38, suggesting a potential upside of 13.03%. WhiteHorse Finance has a consensus target price of $13.80, suggesting a potential downside of 1.57%. Given Apollo Investment’s higher probable upside, analysts clearly believe Apollo Investment is more favorable than WhiteHorse Finance.

Valuation & Earnings

This table compares Apollo Investment and WhiteHorse Finance’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Apollo Investment $279.86 million 4.36 $18.37 million $0.67 8.42
WhiteHorse Finance $54.80 million 5.25 $34.44 million $1.35 10.39

WhiteHorse Finance has lower revenue, but higher earnings than Apollo Investment. Apollo Investment is trading at a lower price-to-earnings ratio than WhiteHorse Finance, indicating that it is currently the more affordable of the two stocks.

Summary

WhiteHorse Finance beats Apollo Investment on 9 of the 16 factors compared between the two stocks.

Apollo Investment Company Profile

Apollo Investment Corporation is a closed-end, externally managed, non-diversified management investment company. The Company’s investment objective is to generate current income and capital appreciation. It invests primarily in various forms of debt investments, including secured and unsecured debt, loan investments and/or equity in private middle-market companies. It may also invest in the securities of public companies and in structured products and other investments, such as collateralized loan obligations (CLOs) and credit-linked notes (CLNs). Its portfolio also includes equity interests, such as common stock, preferred stock, warrants or options. It invests in investments in the United States secured and unsecured loans, other debt securities and equity, and may also invests a portion of the portfolio in other investment opportunities, including foreign securities and structured products. Apollo Investment Management, L.P. is the investment advisor of the Company.

WhiteHorse Finance Company Profile

WhiteHorse Finance, LLC is a business development company.

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