Contrasting Capitala Finance (CPTA) and San Juan Basin Royalty Trust (SJT)

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Capitala Finance (NASDAQ:CPTA) and San Juan Basin Royalty Trust (NYSE:SJT) are both small-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, valuation, dividends, risk, profitability, analyst recommendations and institutional ownership.

Dividends

Capitala Finance pays an annual dividend of $1.00 per share and has a dividend yield of 11.1%. San Juan Basin Royalty Trust pays an annual dividend of $0.19 per share and has a dividend yield of 4.7%. Capitala Finance pays out 100.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. San Juan Basin Royalty Trust has increased its dividend for 5 consecutive years.

Insider & Institutional Ownership

18.0% of Capitala Finance shares are owned by institutional investors. Comparatively, 19.3% of San Juan Basin Royalty Trust shares are owned by institutional investors. 7.3% of Capitala Finance shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Capitala Finance and San Juan Basin Royalty Trust’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Capitala Finance $47.29 million 3.05 -$13.42 million $1.00 8.97
San Juan Basin Royalty Trust $19.47 million 9.77 $17.98 million N/A N/A

San Juan Basin Royalty Trust has lower revenue, but higher earnings than Capitala Finance.

Analyst Ratings

This is a summary of recent recommendations and price targets for Capitala Finance and San Juan Basin Royalty Trust, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Capitala Finance 0 1 0 0 2.00
San Juan Basin Royalty Trust 0 0 0 0 N/A

Capitala Finance currently has a consensus price target of $9.00, indicating a potential upside of 0.33%. Given Capitala Finance’s higher possible upside, equities analysts clearly believe Capitala Finance is more favorable than San Juan Basin Royalty Trust.

Risk & Volatility

Capitala Finance has a beta of 1.16, meaning that its stock price is 16% more volatile than the S&P 500. Comparatively, San Juan Basin Royalty Trust has a beta of 0.01, meaning that its stock price is 99% less volatile than the S&P 500.

Profitability

This table compares Capitala Finance and San Juan Basin Royalty Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Capitala Finance -34.43% 7.86% 3.14%
San Juan Basin Royalty Trust 91.70% 299.92% 230.58%

Summary

San Juan Basin Royalty Trust beats Capitala Finance on 8 of the 13 factors compared between the two stocks.

Capitala Finance Company Profile

Capitala Finance Corp. is a Business Development Company specializing in traditional mezzanine, senior subordinated and unitranche debt, first-lien and second-lien loans, equity investments in sponsored and non-sponsored lower and traditional middle market companies. The fund targets companies in the business services, commercial and professional services, manufacturing, consumer and retail, energy, and health-care industries. It typically considers investments in the United States. The fund invests $5 million and $50 million per transaction in companies with greater than $4.5 million of TTM EBITDA. It may also invest in senior secured positions in "stretch" senior secured loans. The fund makes minority equity co-investments, alongside management or financial sponsors.

San Juan Basin Royalty Trust Company Profile

San Juan Basin Royalty Trust operates as an express trust in Texas. The company has a 75% net overriding royalty interest carved out of Southland's oil and natural gas interests (the subject interests) in properties located in the San Juan Basin in northwestern New Mexico. The subject interests consist of working interests, royalty interests, overriding royalty interests, and other contractual rights in 119,000 net producing acres in San Juan, Rio Arriba, and Sandoval Counties of northwestern New Mexico, as well as 828.1 net wells. Compass Bank serves as the trustee of the San Juan Basin Royalty Trust. The company was founded in 1980 and is based in Fort Worth, Texas.

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