Gladstone Capital (NASDAQ:GLAD – Get Rating) and Unifi (NYSE:UFI – Get Rating) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, earnings, institutional ownership, analyst recommendations, profitability, dividends and risk.
Analyst Ratings
This is a summary of current recommendations and price targets for Gladstone Capital and Unifi, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Gladstone Capital | 0 | 1 | 0 | 0 | 2.00 |
| Unifi | 0 | 0 | 1 | 0 | 3.00 |
Valuation and Earnings
This table compares Gladstone Capital and Unifi’s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Gladstone Capital | $63.15 million | 5.51 | $19.91 million | $0.48 | 19.38 |
| Unifi | $815.76 million | 0.16 | $15.17 million | ($1.54) | -4.80 |
Gladstone Capital has higher earnings, but lower revenue than Unifi. Unifi is trading at a lower price-to-earnings ratio than Gladstone Capital, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Gladstone Capital has a beta of 1.31, meaning that its stock price is 31% more volatile than the S&P 500. Comparatively, Unifi has a beta of 0.88, meaning that its stock price is 12% less volatile than the S&P 500.
Profitability
This table compares Gladstone Capital and Unifi’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Gladstone Capital | 24.71% | 10.13% | 5.05% |
| Unifi | -3.99% | -9.33% | -5.78% |
Institutional and Insider Ownership
9.1% of Gladstone Capital shares are held by institutional investors. Comparatively, 65.7% of Unifi shares are held by institutional investors. 5.0% of Gladstone Capital shares are held by company insiders. Comparatively, 12.9% of Unifi shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Summary
Gladstone Capital beats Unifi on 7 of the 12 factors compared between the two stocks.
About Gladstone Capital
(Get Rating)
Gladstone Capital is a specialty finance company that invests in debt securities consisting primarily of senior term loans, senior subordinated loans, and junior subordinated loans in small and medium sized companies, that meet certain criteria. The criteria can include some or all of the following: the potential for growth in cash flow, adequate assets for loan collateral, experienced management teams with significant ownership interest in the business, adequate capitalization, profitable operations based on the borrower’s cash flow, reasonable capitalization of the borrower and the potential to realize appreciation and gain liquidity in our equity position, if any.
About Unifi
(Get Rating)
Unifi, Inc. engages in the manufacture and sale of synthetic and recycled products made from polyester and nylon. It operates through the following segments: Polyester, Nylon, Brazil, and Asia. The Polyester segment sells polyester-based products to other yarn manufacturers, knitters, and weavers that produce yarn and fabric for the apparel, hosiery, home furnishings, automotive, industrial, and other end-use markets in U.S. and El Salvador. The Nylon segment offers nylon-based products to knitters and weavers that produce fabric for the apparel and hosiery markets in U.S. and Colombia. The Brazil and Asia segments comprises polyester-based products to knitters and weavers that produce fabric for the apparel, home furnishings, automotive, industrial, and other end-use markets principally in South America and Asia. The company was founded by George Allen Mebane IV in 1969 and is headquartered in Greensboro, NC.
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