Critical Survey: BlackRock TCP Capital (NASDAQ:TCPC) versus Hippo (NYSE:HIPO)

BlackRock TCP Capital (NASDAQ:TCPC) and Hippo (NYSE:HIPO) are both small-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, risk, analyst recommendations, dividends, valuation, earnings and profitability.

Institutional & Insider Ownership

43.0% of Hippo shares are owned by institutional investors. 0.2% of BlackRock TCP Capital shares are owned by company insiders. Comparatively, 11.4% of Hippo shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Earnings & Valuation

This table compares BlackRock TCP Capital and Hippo”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BlackRock TCP Capital	-$32.89 million	-22.17	$38.47 million	$0.35	24.34
Hippo	$209.70 million	2.33	-$273.10 million	($10.08)	-1.95

BlackRock TCP Capital has higher earnings, but lower revenue than Hippo. Hippo is trading at a lower price-to-earnings ratio than BlackRock TCP Capital, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

BlackRock TCP Capital has a beta of 1.48, suggesting that its share price is 48% more volatile than the S&P 500. Comparatively, Hippo has a beta of 1.35, suggesting that its share price is 35% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and price targets for BlackRock TCP Capital and Hippo, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BlackRock TCP Capital	1	5	0	0	1.83
Hippo	0	2	1	0	2.33

BlackRock TCP Capital presently has a consensus target price of $9.00, suggesting a potential upside of 6.26%. Hippo has a consensus target price of $19.00, suggesting a potential downside of 3.16%. Given BlackRock TCP Capital’s higher probable upside, research analysts clearly believe BlackRock TCP Capital is more favorable than Hippo.

Profitability

This table compares BlackRock TCP Capital and Hippo’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
BlackRock TCP Capital	-20.11%	14.42%	5.92%
Hippo	-57.80%	-46.46%	-11.11%

Summary

BlackRock TCP Capital beats Hippo on 8 of the 14 factors compared between the two stocks.

About BlackRock TCP Capital

BlackRock TCP Capital Corp. is a business development company specializing in direct equity and debt investments in middle-market, small businesses, debt securities, senior secured loans, junior loans, originated loans, mezzanine, senior debt instruments, bonds, and secondary-market investments. It typically invests in communication services, public relations services, television, wireless telecommunication services, apparel, textile mills, restaurants, retailing, energy, oil and gas extraction, Patent owners and Lessors, Federal and Federally- Sponsored Credit agencies, insurance, hospital and healthcare centers, Biotechnology, engineering services, heavy electrical equipment, tax accounting, scientific and related consulting services, charter freight air transportation, Information technology consulting, application hosting services, software diagram and design, computer aided design, communication equipment, electronics manufacturing equipment, computer components, chemicals. It seeks to invest in the United States. The fund typically invests between $10 million and $35 million in companies with enterprise values between $100 million and $1500 million including complex situations. It prefers to make equity investments in companies for an ownership stake.

About Hippo

Hippo Holdings Inc. provides property and casualty insurance products to individuals and business customers primarily in the United States. The company operates through three segments: Services, Insurance-as-a-Service, and Hippo Home Insurance Program. Its insurance products include homeowners' insurance against risks of fire, wind, and theft, as well as other personal lines policies from third party carriers; and personal and commercial, as well as home, auto, cyber, small business, life, specialty lines, and other insurance products. The company distributes insurance products and services through its technology platform and website, as well as operates licensed insurance agencies. Hippo Holdings Inc. is headquartered in Palo Alto, California.