Analyzing CION Investment (NYSE:CION) and Great Elm Group (NASDAQ:GEG)

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

Earnings and Valuation

This table compares Great Elm Group and CION Investment”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Great Elm Group	$27.78 million	2.47	-$35.44 million	($1.15)	-1.92
CION Investment	$240.82 million	1.47	-$20.63 million	$0.06	119.78

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

Analyst Ratings

This is a breakdown of current ratings and target prices for Great Elm Group and CION Investment, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Great Elm Group	1	0	0	0	1.00
CION Investment	1	2	0	0	1.67

CION Investment has a consensus price target of $6.50, suggesting a potential downside of 9.56%. Given CION Investment’s stronger consensus rating and higher possible upside, analysts clearly believe CION Investment is more favorable than Great Elm Group.

Insider & Institutional Ownership

52.8% of Great Elm Group shares are held by institutional investors. Comparatively, 32.0% of CION Investment shares are held by institutional investors. 49.7% of Great Elm Group shares are held by insiders. Comparatively, 0.6% of CION Investment shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Great Elm Group	-127.61%	-63.44%	-27.48%
CION Investment	1.17%	11.95%	4.52%

Risk and Volatility

Great Elm Group has a beta of 0.57, meaning that its share price is 43% less volatile than the S&P 500. Comparatively, CION Investment has a beta of 1.14, meaning that its share price is 14% more volatile than the S&P 500.

Summary

CION Investment beats Great Elm Group on 10 of the 13 factors compared between the two stocks.

About Great Elm Group

Great Elm Group, Inc. operates as a asset management company. The company engages in credit, real estate, and finance businesses. It is also involved in business development related activities and offers investment management services. The company was formerly known as Great Elm Capital Group, Inc. and changed its name to Great Elm Group, Inc. in December 2020. Great Elm Group, Inc. was incorporated in 1994 and is headquartered in Waltham, Massachusetts.

About CION Investment

CION Investment Corporation is a business development company. It specializes in investments in senior secured loans, including unitranche loans, First Lien, second lien loans, long-term subordinated loans, and mezzanine loans; equity interests such as warrants or options; and corporate bonds; and other debt securities in middle-market companies. The firm invests in growth capital, acquisitions, leveraged buyouts, market/product expansion, refinancing and recapitalization. The fund also invests up to 30 percent of their assets opportunistically in other types of investments, including the securities of larger public companies and foreign securities. It also makes investments in the secondary loan market. The fund does not invest in start-up companies, turnaround situations, or companies with speculative business plans. The fund prefers to invest in high tech industries, healthcare, pharmaceuticals, business services, media, chemicals, plastic, rubber, telecommunication, consumer services, advertising, printing and publishing, consumer goods, durables, diversified financials, and other industries. It also invests in homebuilding, restaurants, beverage and tobacco bars, broadcasting, distributors, Non-durable good distribution, food beverage and tobacco, energy, oil gas and consumables fuels, insurance, aerospace and defense, industrial machinery, paper and forest product machinery, information technology, metals and mining, and real estate. It primarily seeks to invest in the United States. The fund seeks to invest between $5 million and $50 million in companies with an EBITDA between $25 million and $75 million with average targeted hold of $25 million. It also purchases minority interests in the form of common or preferred equity in the target companies, typically in conjunction with its debt investments or through a co-investment with a financial sponsor. The fund seeks to exit its investments through an initial public offering of common stock, a merger, a sale, or other recapitalization.