Financial Review: Gladstone Investment (NASDAQ:GAIN) vs. Metalpha Technology (NASDAQ:MATH)

Gladstone Investment (NASDAQ:GAIN) and Metalpha Technology (NASDAQ:MATH) are both small-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, dividends, risk, institutional ownership, profitability, analyst recommendations and valuation.

Volatility and Risk

Gladstone Investment has a beta of 1.28, suggesting that its share price is 28% more volatile than the S&P 500. Comparatively, Metalpha Technology has a beta of -0.87, suggesting that its share price is 187% less volatile than the S&P 500.

Insider and Institutional Ownership

11.9% of Gladstone Investment shares are held by institutional investors. Comparatively, 30.5% of Metalpha Technology shares are held by institutional investors. 2.5% of Gladstone Investment shares are held by insiders. Comparatively, 5.9% of Metalpha Technology shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Gladstone Investment and Metalpha Technology”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Gladstone Investment	$66.70 million	7.49	$85.31 million	$1.92	7.07
Metalpha Technology	$30.86 million	2.23	-$3.68 million	N/A	N/A

Gladstone Investment has higher revenue and earnings than Metalpha Technology.

Profitability

This table compares Gladstone Investment and Metalpha Technology’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Gladstone Investment	78.02%	7.17%	3.61%
Metalpha Technology	N/A	N/A	N/A

Analyst Ratings

This is a summary of recent recommendations and price targets for Gladstone Investment and Metalpha Technology, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Gladstone Investment	0	2	0	0	2.00
Metalpha Technology	0	0	0	0	0.00

Gladstone Investment presently has a consensus target price of $13.75, suggesting a potential upside of 1.33%. Given Gladstone Investment’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Gladstone Investment is more favorable than Metalpha Technology.

Dividends

Gladstone Investment pays an annual dividend of $0.96 per share and has a dividend yield of 7.1%. Metalpha Technology pays an annual dividend of $0.10 per share and has a dividend yield of 5.6%. Gladstone Investment pays out 50.0% of its earnings in the form of a dividend.

Summary

Gladstone Investment beats Metalpha Technology on 10 of the 13 factors compared between the two stocks.

About Gladstone Investment

Gladstone Investment Corporation is business development company, specializes in lower middle market, mature stage, buyouts; refinancing existing debt; senior debt securities such as senior loans, senior term loans, lines of credit, and senior notes; senior subordinated debt securities such as senior subordinated loans and senior subordinated notes; junior subordinated debt securities such as subordinated notes and mezzanine loans; limited liability company interests, and warrants or options. The fund does not invest in start-ups. The fund seeks to invest in manufacturing, consumer products and business/consumer services sector. It seeks to invest in small and mid-sized companies based in the United States. The fund prefers to make debt investments between $5 million and $30 million and equity investments between $10 million and $40 million in companies. The fund seeks to invest in companies with revenue between $20 million and $100 million. The fund invests in companies with EBITDA from $3 million to $20 million. It seeks minority equity ownership and prefers to hold a board seat in its portfolio companies. It also prefers to take majority stake in its portfolio companies. The fund typically holds the investments for seven years and exits via sale or recapitalization, initial public offering, or sale to third party.

About Metalpha Technology

Metalpha Technology Holding Limited, together with its subsidiaries, provides wealth management services in Hong Kong. The company offers digital asset-based wealth management services, which include issuing traditional financial and cryptocurrency derivative products to over-the-counter clients, providing crypto derivative market making services, and proprietary trading of digital assets and crypto derivative products; and securities advising and asset management services. It serves institutional investors and high-net-worth individuals. The company was formerly known as Dragon Victory International Limited and changed its name to Metalpha Technology Holding Limited in November 2022. The company was incorporated in 2015 and is headquartered in Wan Chai, Hong Kong.