Wednesday, December 7

Contrasting Horizon Technology Finance (NASDAQ:HRZN) and Tekla Life Sciences Investors (NYSE:HQL)


Horizon Technology Finance (NASDAQ:HRZN – Get Rating) and Tekla Life Sciences Investors (NYSE:HQL – Get Rating) are both small-cap finance companies, but which is the better stock? We will compare the two companies based on the strength of their dividends, valuation, analyst recommendations, profitability, risk, earnings and institutional ownership.

Insider and Institutional Ownership

11.3% of Horizon Technology Finance shares are held by institutional investors. Comparatively, 20.7% of Tekla Life Sciences Investors shares are held by institutional investors. 1.5% of Horizon Technology Finance shares are held by insiders. Comparatively, 10.1% of Tekla Life Sciences Investors shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent recommendations for Horizon Technology Finance and Tekla Life Sciences Investors, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Horizon Technology Finance 0 2 0 0 2.00
Tekla Life Sciences Investors 0 0 0 0 N/A

Horizon Technology Finance currently has a consensus price target of $15.50, indicating a potential upside of 29.60%. Given Horizon Technology Finance’s higher possible upside, equities analysts plainly believe Horizon Technology Finance is more favorable than Tekla Life Sciences Investors.

Risk and Volatility

Horizon Technology Finance has a beta of 1, indicating that its stock price has a similar volatility profile to the S&P 500.Comparatively, Tekla Life Sciences Investors has a beta of 0.84, indicating that its stock price is 16% less volatile than the S&P 500.

Earnings & Valuation

This table compares Horizon Technology Finance and Tekla Life Sciences Investors’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Horizon Technology Finance $60.01 million 4.78 $27.78 million $1.24 9.65
Tekla Life Sciences Investors N/A N/A N/A N/A N/A

Horizon Technology Finance has higher revenue and earnings than Tekla Life Sciences Investors.

Profitability

This table compares Horizon Technology Finance and Tekla Life Sciences Investors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Horizon Technology Finance 41.45% 11.32% 5.55%
Tekla Life Sciences Investors N/A N/A N/A

Dividends

Horizon Technology Finance pays an annual dividend of $1.20 per share and has a dividend yield of 10.0%. Tekla Life Sciences Investors pays an annual dividend of $1.59 per share and has a dividend yield of 10.5%. Horizon Technology Finance pays out 96.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

Horizon Technology Finance beats Tekla Life Sciences Investors on 6 of the 10 factors compared between the two stocks.

About Horizon Technology Finance (Get Rating)

Horizon Technology Finance Corporation is a business development company specializing in lending and and investing in development-stage investments. It focuses on making secured debt and venture lending investments to venture capital backed companies in the technology, life science, healthcare information and services, and cleantech industries. It seeks to invest in companies in the United States.

About Tekla Life Sciences Investors (Get Rating)

Tekla Life Sciences Investors is a closed-ended equity mutual fund launched and managed by Tekla Capital Management LLC. The fund invests in public equity markets across the globe. It seeks to invest in stocks of companies operating in the life sciences sector, including the biotechnology, pharmaceutical, diagnostics, managed healthcare, medical equipment, hospitals, healthcare information technology and services, devices and supplies industries, and in agriculture and environmental management industries. The fund primarily invests in growth stocks of small cap companies. It employs fundamental analysis with a focus on factors such as market position for services or products, experience of business management, technological expertise, and the ability either to generate funds internally to finance growth or to secure outside sources of capital to create its portfolio. The fund benchmarks the performance of its portfolio against the NASDAQ Biotech Index and the S&P 500 Index. It was formerly known as H&Q Life Sciences Investors fund. Tekla Life Sciences Investors was formed on February 20, 1992 and is domiciled in the United States.



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