Great Elm Capital (NASDAQ: GECC) and Full Circle Capital (NASDAQ:FULL) are both small-cap financials companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, analyst recommendations, valuation, profitability, institutional ownership, risk and earnings.
Great Elm Capital pays an annual dividend of $1.00 per share and has a dividend yield of 10.3%. Full Circle Capital pays an annual dividend of $0.17 per share and has a dividend yield of 6.4%. Great Elm Capital pays out -416.7% of its earnings in the form of a dividend. Full Circle Capital pays out -40.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Great Elm Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.
This table compares Great Elm Capital and Full Circle Capital’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Great Elm Capital||$5.83 million||17.83||-$17.87 million||($0.24)||-40.58|
|Full Circle Capital||N/A||N/A||N/A||($0.42)||-6.36|
Full Circle Capital has lower revenue, but higher earnings than Great Elm Capital. Great Elm Capital is trading at a lower price-to-earnings ratio than Full Circle Capital, indicating that it is currently the more affordable of the two stocks.
This table compares Great Elm Capital and Full Circle Capital’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Great Elm Capital||N/A||N/A||N/A|
|Full Circle Capital||-11.16%||-1.78%||-1.24%|
This is a breakdown of current ratings for Great Elm Capital and Full Circle Capital, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Great Elm Capital||0||1||2||0||2.67|
|Full Circle Capital||0||0||0||0||N/A|
Great Elm Capital presently has a consensus target price of $13.33, indicating a potential upside of 36.89%. Given Great Elm Capital’s higher probable upside, equities analysts clearly believe Great Elm Capital is more favorable than Full Circle Capital.
Insider and Institutional Ownership
8.1% of Great Elm Capital shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Great Elm Capital beats Full Circle Capital on 10 of the 11 factors compared between the two stocks.
About Great Elm Capital
Great Elm Capital Corp. is a closed-end, non-diversified management investment company. The Company is focused on generating interest and capital appreciation by investing in the capital structures of middle-market companies that operate in a range of industries. The Company also focuses on making multi-year investments, primarily in secured and senior unsecured debt instruments that it purchases in the secondary markets, though it may also originate investments or acquire them directly from issuers. The Company’s investment advisor is Great Elm Capital Management, Inc. (GECM). Great Elm Capital Group is the parent company of GECM.
About Full Circle Capital
Full Circle Capital Corporation is a non-diversified closed-end management investment company. The Company’s investment objective is to generate both current income and capital appreciation through debt and equity investments. The Company invests primarily in senior secured loans and second lien loans, mezzanine loans and equity securities issued by lower middle-market and middle-market companies that operate in a range of industries. In its lending activities, the Company focuses primarily on portfolio companies with both tangible and intangible assets available as collateral and security against its loan to help mitigate its risk of loss, and cash flow to cover debt service. The Company focuses primarily on senior secured loans and stretch senior secured loans (unitranche loans), which combine characteristics of first-lien senior secured loans and second-lien or subordinated loans. The Company’s investment advisor is Full Circle Advisors, LLC (Full Circle Advisors).
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