Amern Cap Sr Fl/COM (NYSE: SCM) and Stellus Capital Investment (NYSE:SCM) are both small-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, dividends, profitability, analyst recommendations, valuation, earnings and risk.

Institutional and Insider Ownership

23.4% of Amern Cap Sr Fl/COM shares are held by institutional investors. Comparatively, 24.7% of Stellus Capital Investment shares are held by institutional investors. 0.2% of Amern Cap Sr Fl/COM shares are held by company insiders. Comparatively, 5.4% of Stellus Capital Investment shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current recommendations for Amern Cap Sr Fl/COM and Stellus Capital Investment, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Amern Cap Sr Fl/COM 0 0 0 0 N/A
Stellus Capital Investment 0 1 1 0 2.50

Stellus Capital Investment has a consensus target price of $14.25, indicating a potential upside of 3.56%. Given Stellus Capital Investment’s higher probable upside, analysts plainly believe Stellus Capital Investment is more favorable than Amern Cap Sr Fl/COM.

Dividends

Amern Cap Sr Fl/COM pays an annual dividend of $1.16 per share and has a dividend yield of 9.5%. Stellus Capital Investment pays an annual dividend of $1.36 per share and has a dividend yield of 9.9%. Stellus Capital Investment pays out 112.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares Amern Cap Sr Fl/COM and Stellus Capital Investment’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Amern Cap Sr Fl/COM 30.24% 3.27% 1.82%
Stellus Capital Investment 59.39% 8.16% 4.07%

Risk & Volatility

Amern Cap Sr Fl/COM has a beta of 1.11, meaning that its share price is 11% more volatile than the S&P 500. Comparatively, Stellus Capital Investment has a beta of 0.55, meaning that its share price is 45% less volatile than the S&P 500.

Earnings & Valuation

This table compares Amern Cap Sr Fl/COM and Stellus Capital Investment’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Amern Cap Sr Fl/COM $17.52 million 6.99 $5.70 million N/A N/A
Stellus Capital Investment $39.65 million 5.54 $22.61 million $1.21 11.37

Stellus Capital Investment has higher revenue and earnings than Amern Cap Sr Fl/COM.

Summary

Stellus Capital Investment beats Amern Cap Sr Fl/COM on 10 of the 13 factors compared between the two stocks.

About Amern Cap Sr Fl/COM

American Capital Senior Floating, Ltd. is a business development company specializing in first lien and second lien floating rate loans. It also invests in equity tranches of collateralized loan obligations equity tranches of collateralized loan obligations.

About Stellus Capital Investment

Stellus Capital Investment Corporation is a business development company specializing in investments in private middle-market companies. It invests through first lien, second lien, unitranche, and mezzanine debt financing, often with a corresponding equity investment. The fund seeks to invest in companies with an EBITDA between $5 million and $50 million.

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