Safeguard Scientifics (NYSE: SFE) and Gamco Investors (NYSE:GBL) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, valuation, analyst recommendations, profitability, earnings, dividends and risk.

Dividends

Gamco Investors pays an annual dividend of $0.08 per share and has a dividend yield of 0.3%. Safeguard Scientifics does not pay a dividend. Gamco Investors pays out 2.2% of its earnings in the form of a dividend. Gamco Investors has raised its dividend for 5 consecutive years.

Risk & Volatility

Safeguard Scientifics has a beta of 1.3, suggesting that its share price is 30% more volatile than the S&P 500. Comparatively, Gamco Investors has a beta of 1.08, suggesting that its share price is 8% more volatile than the S&P 500.

Earnings & Valuation

This table compares Safeguard Scientifics and Gamco Investors’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Safeguard Scientifics N/A N/A -$17.72 million ($4.76) -2.75
Gamco Investors $361.19 million 0.82 $181.57 million $3.68 7.84

Gamco Investors has higher revenue and earnings than Safeguard Scientifics. Safeguard Scientifics is trading at a lower price-to-earnings ratio than Gamco Investors, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current ratings for Safeguard Scientifics and Gamco Investors, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Safeguard Scientifics 0 0 0 0 N/A
Gamco Investors 0 0 0 0 N/A

Profitability

This table compares Safeguard Scientifics and Gamco Investors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Safeguard Scientifics N/A -61.90% -42.77%
Gamco Investors 30.81% -54.62% 53.85%

Insider & Institutional Ownership

77.6% of Safeguard Scientifics shares are owned by institutional investors. Comparatively, 25.4% of Gamco Investors shares are owned by institutional investors. 2.7% of Safeguard Scientifics shares are owned by insiders. Comparatively, 79.0% of Gamco Investors shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

Gamco Investors beats Safeguard Scientifics on 9 of the 12 factors compared between the two stocks.

About Safeguard Scientifics

Safeguard Scientifics, Inc. is engaged in providing capital to technology companies within the fields of healthcare, financial services and digital media. The Company holds interest in companies, which it refers to as partner companies. As of December 31, 2016, the Company held interests in 29 non-consolidated partner companies. The Company offers operational and management support to each of its partner companies. In addition to management and operational support, the Company offers ongoing planning and development assessment. It provides mentoring, advice and guidance to develop partner company management. The Company serves on the boards of directors of its partner companies, working with them to develop and implement strategic and operating plans. It measures and monitors achievement of these plans through regular review of operational and financial performance measurements.

About Gamco Investors

GAMCO Investors, Inc. is a holding company. The Company is a provider of investment advisory services to open and closed-end funds, institutional and private wealth management investors principally in the United States. The Company operates through the investment advisory and asset management business segment. It manages assets on a discretionary basis and invests in securities through various investment styles. Its assets under management are organized into three groups: Institutional and Private Wealth Management; Open and Closed-End Funds, and the GAMCO International SICAV (SICAV). The Company provides advisory services to a range of investors, including corporate retirement plans, foundations, endowments and private wealth clients, and also serves as sub-advisor to third-party investment funds, including registered investment companies. As of December 31, 2016, it had provided advisory services to 21 open-end funds, 15 closed-end funds and one exchange traded managed fund.

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