Nuveen Municipal Income Fund (NYSE:NMI) versus Horizon Technology Finance (NASDAQ:HRZN) Critical Survey

Horizon Technology Finance (NASDAQ:HRZN) and Nuveen Municipal Income Fund (NYSE:NMI) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, dividends, risk, valuation, profitability, analyst recommendations and institutional ownership.

Risk and Volatility

Horizon Technology Finance has a beta of 1.23, meaning that its stock price is 23% more volatile than the S&P 500. Comparatively, Nuveen Municipal Income Fund has a beta of 0.24, meaning that its stock price is 76% less volatile than the S&P 500.

Dividends

Horizon Technology Finance pays an annual dividend of $1.32 per share and has a dividend yield of 12.5%. Nuveen Municipal Income Fund pays an annual dividend of $0.42 per share and has a dividend yield of 4.2%. Horizon Technology Finance pays out -314.3% of its earnings in the form of a dividend.

Analyst Recommendations

This is a summary of current ratings and target prices for Horizon Technology Finance and Nuveen Municipal Income Fund, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Horizon Technology Finance	3	3	0	0	1.50
Nuveen Municipal Income Fund	0	0	0	0	N/A

Horizon Technology Finance presently has a consensus target price of $9.70, indicating a potential downside of 8.40%. Given Horizon Technology Finance’s higher probable upside, research analysts clearly believe Horizon Technology Finance is more favorable than Nuveen Municipal Income Fund.

Valuation and Earnings

This table compares Horizon Technology Finance and Nuveen Municipal Income Fund”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Horizon Technology Finance	-$15.38 million	-24.12	-$17.18 million	($0.42)	-25.21
Nuveen Municipal Income Fund	$4.57 million	22.07	N/A	N/A	N/A

Nuveen Municipal Income Fund has higher revenue and earnings than Horizon Technology Finance.

Profitability

This table compares Horizon Technology Finance and Nuveen Municipal Income Fund’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Horizon Technology Finance	-21.19%	17.39%	7.26%
Nuveen Municipal Income Fund	N/A	N/A	N/A

Insider & Institutional Ownership

4.9% of Horizon Technology Finance shares are held by institutional investors. Comparatively, 16.6% of Nuveen Municipal Income Fund shares are held by institutional investors. 1.4% of Horizon Technology Finance shares are held by insiders. Comparatively, 1.0% of Nuveen Municipal Income Fund shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

Horizon Technology Finance beats Nuveen Municipal Income Fund on 7 of the 11 factors compared between the two stocks.

About Horizon Technology Finance

Horizon Technology Finance Corporation is a business development company specializing in lending and and investing in development-stage investments. It focuses on making secured debt and venture lending investments to venture capital backed companies in the technology, life science, healthcare information and services, cleantech and sustainability industries. It seeks to invest in companies in the United States.

About Nuveen Municipal Income Fund

Nuveen Municipal Income Fund, Inc. is a closed ended fixed income mutual fund launched by Nuveen Investments Inc. The fund is co-managed by Nuveen Fund Advisors LLC and Nuveen Asset Management, LLC. It invests in the fixed income markets of the United States. The fund primarily invests in municipal obligations issued by state and local government authorities. Its investment portfolio comprises investment in companies operating in various industries, including healthcare, materials, education and civic organizations, and consumer staples. Nuveen Municipal Income Fund was formed on April 20, 1988 and is based in the United States.