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Medallion Financial Corp
Medallion Financial Corp. operates as a specialty finance company in the United States. It originates and services loans that finance taxicab medallions, which are licenses issued by the New York City Taxi and Limousine Commission to operate a yellow or green taxicab in New York City.
The company offers secured loans to the taxicab industry; and enters into lease agreements with taxi medallion owners. Its secured loans are backed by the collateral of the taxicab medallions and repaid primarily from the cash generated by the lease payments paid by the lessee/borrowers.
The company also provides consumer loans and equipment financing; and acquires receivables and participation interests in consumer loans.
In addition, it owns and operates a fleet of taxicabs, as well as provides financing for the purchase of taxicab medallions.
The company was founded in 1995 and is based in New York, New York.
Earnings :
The company has consistently shown strong earnings growth over the past few years, with net income increasing by 44.6% in 2022 compared to the previous year. This growth is primarily due to an increase in interest income from the company's medallion loans and leases, as well as an increase in its average medallion portfolio.
Growth :
Medallion Financial has grown its earnings at a compounded rate of 11% annually over the past five years, and analysts predict that this growth will continue in the future. The company's focus on the niche market of taxi medallion lending has allowed it to achieve strong returns and maintain low default rates.
Valuation :
As of March 11th 2 '23, Medallion Financial Corp's stock (TAXI) is traded at around $15.38, with a market capitalization of $261.7 million. Its price-to-earnings ratio is currently 8.87, which is relatively low compared to the industry average of 13.95. The company's low valuation and strong earnings growth make it an attractive investment opportunity.
Insider Activity :
Insiders own 44% of Medallion Financial Corp, indicating significant skin in the game. This, coupled with the company's strong return on equity of 19.97%, suggests that insiders have a strong incentive to ensure the company's success.
Dividends :
Medallion Financial Corp has consistently paid dividends and currently offers a 3.33% dividend yield, which is slightly higher than the industry average of 3.21%. The company's history of paying dividends demonstrates management's commitment to returning value to shareholders.
Growth Catalysts :
The company has several growth catalysts, including the growing demand for ride-hailing services, the increasing popularity of electric vehicles, and the continued growth of the gig economy.