Reviewing Medallion Financial (NASDAQ:MFIN) & Grenke (OTCMKTS:GKSGF)

Medallion Financial (NASDAQ:MFINGet Free Report) and Grenke (OTCMKTS:GKSGFGet Free Report) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, dividends, institutional ownership, risk, valuation, earnings and analyst recommendations.

Dividends

Medallion Financial pays an annual dividend of $0.40 per share and has a dividend yield of 3.9%. Grenke pays an annual dividend of 0.30 per share and has a dividend yield of 0.9%. Medallion Financial pays out 17.1% of its earnings in the form of a dividend. Grenke pays out 7.3% 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. Medallion Financial has raised its dividend for 2 consecutive years. Medallion Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares Medallion Financial and Grenke’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Medallion Financial $176.89 million 1.34 $43.84 million $2.34 4.33
Grenke N/A N/A N/A 4.09 8.56

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

Profitability

This table compares Medallion Financial and Grenke’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Medallion Financial 21.77% 14.06% 2.22%
Grenke N/A N/A N/A

Institutional & Insider Ownership

19.1% of Medallion Financial shares are owned by institutional investors. Comparatively, 28.5% of Grenke shares are owned by institutional investors. 22.4% of Medallion Financial shares are owned by company 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.

Analyst Recommendations

This is a summary of recent ratings and target prices for Medallion Financial and Grenke, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Medallion Financial 0 1 1 0 2.50
Grenke 0 0 2 0 3.00

Medallion Financial presently has a consensus target price of $12.00, suggesting a potential upside of 18.34%. Given Medallion Financial’s higher possible upside, research analysts plainly believe Medallion Financial is more favorable than Grenke.

Summary

Medallion Financial beats Grenke on 8 of the 14 factors compared between the two stocks.

About Medallion Financial

(Get Free Report)

Medallion Financial Corp., together with its subsidiaries, operates as a finance company in the United States. The company operates through four segments: Recreation Lending, Home Improvement Lending, Commercial Lending, and Medallion Lending. It provides loans that finance consumer purchases of recreational vehicles, boats, and trailers; consumer home improvements; commercial businesses; and taxi medallions to individuals, and small to mid-size businesses. The company also offers commercial loans for purchase of equipment and related assets necessary to open a new business, or purchase or improvement of an existing business; and medallion loans. In addition, it provides debt, mezzanine, and equity investment capital to companies in various industries; and raises deposits and conducts other banking activities. Medallion Financial Corp. was incorporated in 1995 and is headquartered in New York City, New York.

About Grenke

(Get Free Report)

Grenke AG, together with its subsidiaries, provides financial services to small and medium-sized (SME) enterprises in Germany, France, Italy, and internationally. It operates through three segments: Leasing, Banking, and Factoring. The company is involved in the leasing activities, such as financing to commercial lessees, leasing, service, protection, and maintenance offerings, as well as sale of used equipment; and small-ticket leasing of IT products, such as PCs, notebooks, servers, monitors, peripheral equipment, software, telecommunication and copier equipment, and medical devices, as well as other IT products. It also provides banking products and services, such as fixed deposits to private and business customers through its website; financing services to business start-ups, as well as development loans to SMEs and self-employed professionals; and small-ticket factoring services. The company was formerly known as GrenkeLeasing AG and changed its name to Grenke AG in May 2016. Grenke AG was founded in 1978 and is headquartered in Baden-Baden, Germany.

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