Reviewing Dragon Victory International (LYL) and Capitala Finance (CPTA)

Dragon Victory International (NASDAQ:LYL) and Capitala Finance (NASDAQ:CPTA) are both small-cap computer and technology companies, but which is the superior business? We will compare the two companies based on the strength of their risk, analyst recommendations, valuation, profitability, earnings, institutional ownership and dividends.

Earnings & Valuation

This table compares Dragon Victory International and Capitala Finance’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Dragon Victory International $4.28 million 4.83 $190,000.00 N/A N/A
Capitala Finance $51.09 million 2.50 -$6.98 million $0.98 8.12

Dragon Victory International has higher earnings, but lower revenue than Capitala Finance.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Dragon Victory International and Capitala Finance, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Dragon Victory International 0 0 0 0 N/A
Capitala Finance 0 1 1 0 2.50

Capitala Finance has a consensus price target of $9.00, suggesting a potential upside of 13.16%. Given Capitala Finance’s higher possible upside, analysts plainly believe Capitala Finance is more favorable than Dragon Victory International.

Institutional & Insider Ownership

0.1% of Dragon Victory International shares are owned by institutional investors. Comparatively, 15.8% of Capitala Finance shares are owned by institutional investors. 9.1% of Capitala Finance shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Dragon Victory International and Capitala Finance’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Dragon Victory International N/A N/A N/A
Capitala Finance -16.14% 7.76% 3.20%

Dividends

Capitala Finance pays an annual dividend of $1.00 per share and has a dividend yield of 12.6%. Dragon Victory International does not pay a dividend. Capitala Finance pays out 102.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

Capitala Finance beats Dragon Victory International on 8 of the 12 factors compared between the two stocks.

About Dragon Victory International

Dragon Victory International Limited provides reward-based crowdfunding in China. The company operates through four segments: Crowdfunding Platform Service, Incubation Services, Finder's Fees Services, and Auto-Parts Procurement Services. It operates 5etou, an online crowdfunding platform at 5etou.cn that enables project searching for funding to connect with funding sources. The company also operates auto-parts service operation that serves auto-repair shops seeking and transacting with auto-parts suppliers. In addition, it offers finder's service to assist companies to obtain loans or additional equity financing, introduce them to potential business partners, find merger candidates or other strategic relationships, or assist with feasibility studies. Further, the company provides business incubation services related to marketing, sales, strategic planning, and guidance and general resources in ancillary services, such as coordinating human resources, legal, accounting, operations, assisting with feasibility studies, and other types of services. Dragon Victory International Limited was founded in 2015 and is headquartered in Hangzhou, the People's Republic of China.

About Capitala Finance

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.

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