Reviewing PennantPark Investment (NASDAQ:PNNT) and Metalpha Technology (NASDAQ:MATH)

Metalpha Technology (NASDAQ:MATH) and PennantPark Investment (NASDAQ:PNNT) are both small-cap computer and technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, profitability, risk, analyst recommendations, valuation, institutional ownership and dividends.

Institutional & Insider Ownership

30.5% of Metalpha Technology shares are held by institutional investors. Comparatively, 26.6% of PennantPark Investment shares are held by institutional investors. 5.9% of Metalpha Technology shares are held by company insiders. Comparatively, 3.0% of PennantPark Investment shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Metalpha Technology and PennantPark Investment”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Metalpha Technology	$30.86 million	2.97	-$3.68 million	N/A	N/A
PennantPark Investment	$64.78 million	6.87	$48.85 million	$0.15	45.41

PennantPark Investment has higher revenue and earnings than Metalpha Technology.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Metalpha Technology	N/A	N/A	N/A
PennantPark Investment	11.33%	11.59%	4.23%

Analyst Ratings

This is a summary of current ratings for Metalpha Technology and PennantPark Investment, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Metalpha Technology	0	0	0	0	0.00
PennantPark Investment	0	3	0	0	2.00

PennantPark Investment has a consensus price target of $6.00, indicating a potential downside of 11.91%. Given PennantPark Investment’s stronger consensus rating and higher possible upside, analysts clearly believe PennantPark Investment is more favorable than Metalpha Technology.

Volatility and Risk

Metalpha Technology has a beta of -1.24, meaning that its share price is 224% less volatile than the S&P 500. Comparatively, PennantPark Investment has a beta of 1.02, meaning that its share price is 2% more volatile than the S&P 500.

Dividends

Metalpha Technology pays an annual dividend of $0.10 per share and has a dividend yield of 4.2%. PennantPark Investment pays an annual dividend of $0.96 per share and has a dividend yield of 14.1%. PennantPark Investment pays out 640.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. PennantPark Investment has increased its dividend for 1 consecutive years. PennantPark Investment is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

PennantPark Investment beats Metalpha Technology on 11 of the 14 factors compared between the two stocks.

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.

About PennantPark Investment

PennantPark Investment Corporation, a business development company is a private equity fund specializes in direct and mezzanine investments in middle market companies. It invests in the form of mezzanine debt, senior secured loans, and equity investments. The fund typically invests in buildings and real estate, hotels, gaming and leisure, technology, telecommunications, transportation, information technology services, electronics, healthcare & pharmaceuticals, education and childcare, financial services, printing and publishing, consumer products, business services, energy & Related Services and utilities, distribution, oil and gas, media, environmental services, aerospace and defense, building materials, capital equipment, chemicals, plastics, & rubber, food & beverage, wholesale, manufacturing and basic industries and retail. It invests in equity securities and debt transactions through preferred stock, common stock, warrants, options, senior secured debt, subordinated debt, subordinated loans, first lien debt, mezzanine loans, and distressed debt securities and private equity co-investments. It seeks to invest in companies based in the United States. The fund seeks to invest between $10 million and $100 million cross the capital structure (senior secured loans, subordinated debt, and other investments) in its portfolio companies with EBITDA between $10 to $50 million. Its mezzanine loans, senior secured loans, and other investments in its portfolio companies are between $15 million and $50 million. The fund may also make non-control equity and debt investments.