9F (NASDAQ:JFU) & Runway Growth Finance (NASDAQ:RWAY) Critical Analysis

Runway Growth Finance (NASDAQ:RWAY) and 9F (NASDAQ:JFU) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, valuation, institutional ownership, risk, profitability, dividends and analyst recommendations.

Institutional & Insider Ownership

64.6% of Runway Growth Finance shares are held by institutional investors. 1.7% of Runway Growth Finance shares are held by insiders. Comparatively, 53.9% of 9F shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent recommendations for Runway Growth Finance and 9F, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Runway Growth Finance	0	3	2	0	2.40
9F	0	0	0	0	0.00

Runway Growth Finance currently has a consensus target price of $11.65, indicating a potential upside of 10.95%. Given Runway Growth Finance’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Runway Growth Finance is more favorable than 9F.

Valuation and Earnings

This table compares Runway Growth Finance and 9F”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Runway Growth Finance	$85.89 million	4.57	$44.34 million	$1.91	5.50
9F	$295.14 million	0.06	-$19.75 million	N/A	N/A

Runway Growth Finance has higher earnings, but lower revenue than 9F.

Profitability

This table compares Runway Growth Finance and 9F’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Runway Growth Finance	27.05%	12.91%	6.33%
9F	N/A	N/A	N/A

Volatility and Risk

Runway Growth Finance has a beta of 0.59, indicating that its share price is 41% less volatile than the S&P 500. Comparatively, 9F has a beta of 0.47, indicating that its share price is 53% less volatile than the S&P 500.

Summary

Runway Growth Finance beats 9F on 10 of the 12 factors compared between the two stocks.

About Runway Growth Finance

Runway Growth Finance Corp. is a business development company specializing investments in senior-secured loans to late stage and growth companies. It prefers to make investments in companies engaged in the technology, life sciences, healthcare and information services, business services and select consumer services and products sectors. It prefers to investments in companies engaged in electronic equipment and instruments, systems software, hardware, storage and peripherals and specialized consumer services, application software, healthcare technology, internet software and services, data processing and outsourced services, internet retail, human resources and employment services, biotechnology, healthcare equipment and education services. It invests in senior secured loans between $10 million and $75 million.

About 9F

9F Inc., together with its subsidiaries, operates internet securities service platform in the People's Republic of China. The company operates through three segments: Technology Empowerment Services, E-commerce business, and Wealth Management. Its products include digital financial accounts that offer online lending, wealth management, and payment facilitation services; revolving and non-revolving loan products to borrowers, as well as traffic referral services to financial institution partners; and a suite of online wealth management products, such as fixed income products, stocks, insurance, bank wealth management products, and mutual funds to investors in various platforms, including Wukong Licai, 9F Wallet, and 9F Puhui. The company also provides payment facilitation and other products and services that help users to pay credit card bills and household bills comprising utility bills; and other value-added services consisting of credit history search, debt consolidation, and user referral services. In addition, it offers technology empowerment services to banking, automobile, securities investment, and insurance industries; and engages in E-commerce business, which offers various categories of merchandise, including 3C products, beauty and skin care products, food, household appliances, and liquor and beverages. It provides its services to borrowers, investors, and financial institutions partners. The company was formerly known as JIUFU Financial Technology Service Limited and changed its name to 9F Inc. in June 2014. 9F Inc. was founded in 2006 and is headquartered in Beijing, the People's Republic of China.