Cannae (NYSE:CNNE) and Great Elm Capital Group (NASDAQ:GECC) Head-To-Head Contrast

Great Elm Capital Group (NASDAQ:GECC) and Cannae (NYSE:CNNE) are both small-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, earnings, dividends, profitability, valuation and risk.

Insider and Institutional Ownership

38.8% of Great Elm Capital Group shares are held by institutional investors. Comparatively, 88.1% of Cannae shares are held by institutional investors. 8.7% of Great Elm Capital Group shares are held by insiders. Comparatively, 10.9% of Cannae shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Great Elm Capital Group and Cannae”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Great Elm Capital Group	$39.32 million	2.57	$3.55 million	($0.56)	-12.91
Cannae	$452.50 million	1.73	-$304.60 million	($7.73)	-2.05

Great Elm Capital Group has higher earnings, but lower revenue than Cannae. Great Elm Capital Group is trading at a lower price-to-earnings ratio than Cannae, indicating that it is currently the more affordable of the two stocks.

Dividends

Great Elm Capital Group pays an annual dividend of $1.48 per share and has a dividend yield of 20.5%. Cannae pays an annual dividend of $0.60 per share and has a dividend yield of 3.8%. Great Elm Capital Group pays out -264.3% of its earnings in the form of a dividend. Cannae pays out -7.8% 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 Group has increased its dividend for 2 consecutive years. Great Elm Capital Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

Great Elm Capital Group has a beta of 0.64, indicating that its stock price is 36% less volatile than the S&P 500. Comparatively, Cannae has a beta of 1.11, indicating that its stock price is 11% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Great Elm Capital Group and Cannae, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Great Elm Capital Group	1	2	0	0	1.67
Cannae	1	1	2	0	2.25

Great Elm Capital Group currently has a consensus target price of $10.50, indicating a potential upside of 45.23%. Cannae has a consensus target price of $20.50, indicating a potential upside of 29.42%. Given Great Elm Capital Group’s higher possible upside, equities analysts clearly believe Great Elm Capital Group is more favorable than Cannae.

Profitability

This table compares Great Elm Capital Group and Cannae’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Great Elm Capital Group	-17.08%	10.97%	3.95%
Cannae	-108.39%	-23.16%	-18.38%

Summary

Great Elm Capital Group beats Cannae on 10 of the 17 factors compared between the two stocks.

About Great Elm Capital Group

Great Elm Capital Corp. is a business development company which specializes in loan and mezzanine, middle market investments. It invests in the debt instruments of middle market companies. The fund prefers to invest in media, commercial services and supplies, healthcare, telecommunication services, communications equipment. It typically makes equity investments between $3 million and $10 million in companies with revenues between $3 million and $75 million.

About Cannae

Cannae Holdings, Inc. is a principal investment firm. The firm primarily invests in restaurants, technology enabled healthcare services, financial services and more. It takes both minority and majority stakes. Cannae Holdings, Inc. was founded in 2014 and is based in Las Vegas, Nevada.