Contrasting Waton Financial (NASDAQ:WTF) and CION Investment (NYSE:CION)

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

Institutional and Insider Ownership

32.0% of CION Investment shares are held by institutional investors. 0.6% of CION Investment shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Waton Financial and CION Investment’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Waton Financial	N/A	N/A	N/A
CION Investment	1.17%	11.76%	4.51%

Analyst Recommendations

This is a summary of current ratings and target prices for Waton Financial and CION Investment, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Waton Financial	1	0	0	0	1.00
CION Investment	2	1	0	0	1.33

CION Investment has a consensus price target of $6.50, suggesting a potential downside of 12.99%. Given CION Investment’s stronger consensus rating and higher probable upside, analysts plainly believe CION Investment is more favorable than Waton Financial.

Volatility and Risk

Waton Financial has a beta of 1.2, suggesting that its stock price is 20% more volatile than the S&P 500. Comparatively, CION Investment has a beta of 1.11, suggesting that its stock price is 11% more volatile than the S&P 500.

Valuation and Earnings

This table compares Waton Financial and CION Investment”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Waton Financial	$11.08 million	12.21	-$15.15 million	N/A	N/A
CION Investment	$240.82 million	1.53	-$20.63 million	$0.06	124.50

Waton Financial has higher earnings, but lower revenue than CION Investment.

Summary

CION Investment beats Waton Financial on 8 of the 11 factors compared between the two stocks.

About Waton Financial

Waton Financial Ltd. is a holding company, which engages in the provision of securities brokerage and financial technology services. It is also involved in software licensing and related support services including the licensing of trading platform app, upgrades and enhancements, maintenance, and other related services to financial institutions. The company was founded on June 25, 2010 and is headquartered in Hong Kong.

About CION Investment

CION Investment Corporation is a business development company. It specializes in investments in senior secured loans, including unitranche loans, First Lien, second lien loans, long-term subordinated loans, and mezzanine loans; equity interests such as warrants or options; and corporate bonds; and other debt securities in middle-market companies. The firm invests in growth capital, acquisitions, leveraged buyouts, market/product expansion, refinancing and recapitalization. The fund also invests up to 30 percent of their assets opportunistically in other types of investments, including the securities of larger public companies and foreign securities. It also makes investments in the secondary loan market. The fund does not invest in start-up companies, turnaround situations, or companies with speculative business plans. The fund prefers to invest in high tech industries, healthcare, pharmaceuticals, business services, media, chemicals, plastic, rubber, telecommunication, consumer services, advertising, printing and publishing, consumer goods, durables, diversified financials, and other industries. It also invests in homebuilding, restaurants, beverage and tobacco bars, broadcasting, distributors, Non-durable good distribution, food beverage and tobacco, energy, oil gas and consumables fuels, insurance, aerospace and defense, industrial machinery, paper and forest product machinery, information technology, metals and mining, and real estate. It primarily seeks to invest in the United States. The fund seeks to invest between $5 million and $50 million in companies with an EBITDA between $25 million and $75 million with average targeted hold of $25 million. It also purchases minority interests in the form of common or preferred equity in the target companies, typically in conjunction with its debt investments or through a co-investment with a financial sponsor. The fund seeks to exit its investments through an initial public offering of common stock, a merger, a sale, or other recapitalization.