Financial Review: Piper Sandler Companies (NYSE:PIPR) and Eagle Point Credit (NYSE:ECC)

Eagle Point Credit (NYSE:ECC) and Piper Sandler Companies (NYSE:PIPR) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their analyst recommendations, risk, profitability, valuation, dividends, institutional ownership and earnings.

Insider and Institutional Ownership

19.5% of Eagle Point Credit shares are held by institutional investors. Comparatively, 72.8% of Piper Sandler Companies shares are held by institutional investors. 0.3% of Eagle Point Credit shares are held by company insiders. Comparatively, 3.1% of Piper Sandler Companies 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.

Earnings and Valuation

This table compares Eagle Point Credit and Piper Sandler Companies”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Eagle Point Credit	$203.99 million	1.87	-$115.00 million	$0.61	4.73
Piper Sandler Companies	$2.05 billion	2.23	$281.33 million	$4.32	14.97

Piper Sandler Companies has higher revenue and earnings than Eagle Point Credit. Eagle Point Credit is trading at a lower price-to-earnings ratio than Piper Sandler Companies, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Eagle Point Credit has a beta of 0.38, meaning that its share price is 62% less volatile than the S&P 500. Comparatively, Piper Sandler Companies has a beta of 1.43, meaning that its share price is 43% more volatile than the S&P 500.

Dividends

Eagle Point Credit pays an annual dividend of $1.12 per share and has a dividend yield of 38.8%. Piper Sandler Companies pays an annual dividend of $0.80 per share and has a dividend yield of 1.2%. Eagle Point Credit pays out 183.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Piper Sandler Companies pays out 18.5% of its earnings in the form of a dividend. Piper Sandler Companies has increased its dividend for 1 consecutive years.

Profitability

This table compares Eagle Point Credit and Piper Sandler Companies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Eagle Point Credit	-84.29%	-1.83%	-0.99%
Piper Sandler Companies	14.51%	21.92%	14.60%

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Eagle Point Credit and Piper Sandler Companies, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Eagle Point Credit	0	2	2	0	2.50
Piper Sandler Companies	2	1	3	0	2.17

Eagle Point Credit currently has a consensus target price of $3.75, indicating a potential upside of 29.98%. Piper Sandler Companies has a consensus target price of $90.81, indicating a potential upside of 40.40%. Given Piper Sandler Companies’ higher possible upside, analysts clearly believe Piper Sandler Companies is more favorable than Eagle Point Credit.

Summary

Piper Sandler Companies beats Eagle Point Credit on 15 of the 17 factors compared between the two stocks.

About Eagle Point Credit

Eagle Point Credit Company Inc. is a closed ended fund launched and managed by Eagle Point Credit Management LLC. It invests in fixed income markets of the United States. The fund invests equity and junior debt tranches of collateralized loan obligations consisting primarily of below investment grade U.S. senior secured loans. Eagle Point Credit Company Inc. was formed on March 24, 2014 and is domiciled in the United States.

About Piper Sandler Companies

Piper Sandler Companies operates as an investment bank and institutional securities firm that serves corporations, private equity groups, public entities, non-profit entities, and institutional investors in the United States and internationally. The company offers investment banking and institutional sales, trading, and research services for various equity and fixed income products. It provides advisory services, such as mergers and acquisitions, equity private placements, and debt and restructuring advisory; raises capital through equity and debt financings; underwrites municipal issuances; and offers municipal financial advisory and loan placement services, as well as various over-the-counter derivative products. The company also offers public finance investment banking services that focus on state and local governments, and cultural and social service non-profit entities, as well as the education, healthcare, hospitality, senior living, and transportation sectors. In addition, it provides equity and fixed income advisory and trade execution services for institutional investors, and government and non-profit entities. Further, the company is involved in the alternative asset management funds merchant banking and healthcare to invest firm capital and to manage capital from outside investors, as well as trading activities. The company was formerly known as Piper Jaffray Companies and changed its name to Piper Sandler Companies in January 2020. Piper Sandler Companies was founded in 1895 and is headquartered in Minneapolis, Minnesota.