Analyzing Patria Investments (NYSE:PAX) and Great Elm Capital (NASDAQ:GECC)

Patria Investments (NYSE:PAXGet Rating) and Great Elm Capital (NASDAQ:GECCGet Rating) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, earnings, valuation, profitability, risk and dividends.

Insider & Institutional Ownership

45.7% of Great Elm Capital shares are held by institutional investors. 1.9% of Great Elm Capital 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 Ratings

This is a breakdown of current ratings and price targets for Patria Investments and Great Elm Capital, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Patria Investments 0 0 2 0 3.00
Great Elm Capital 0 0 0 0 N/A

Patria Investments currently has a consensus price target of $25.50, suggesting a potential upside of 56.15%. Given Patria Investments’ higher possible upside, equities research analysts plainly believe Patria Investments is more favorable than Great Elm Capital.

Profitability

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

Net Margins Return on Equity Return on Assets
Patria Investments 52.03% 32.22% 26.27%
Great Elm Capital -40.69% -19.03% -4.22%

Valuation & Earnings

This table compares Patria Investments and Great Elm Capital’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Patria Investments $146.40 million 5.78 $141.30 million $0.90 18.18
Great Elm Capital $25.25 million 2.69 -$10.27 million $0.48 30.73

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

Volatility and Risk

Patria Investments has a beta of -0.63, meaning that its stock price is 163% less volatile than the S&P 500. Comparatively, Great Elm Capital has a beta of 1.83, meaning that its stock price is 83% more volatile than the S&P 500.

Dividends

Patria Investments pays an annual dividend of $0.64 per share and has a dividend yield of 3.9%. Great Elm Capital pays an annual dividend of $2.40 per share and has a dividend yield of 16.3%. Patria Investments pays out 71.1% of its earnings in the form of a dividend. Great Elm Capital pays out 500.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Great Elm Capital has raised its dividend for 2 consecutive years. Great Elm Capital is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Patria Investments beats Great Elm Capital on 10 of the 16 factors compared between the two stocks.

Patria Investments Company Profile (Get Rating)

Patria Investments Limited operates as a private market investment firm focused on investing in Latin America. The company offers asset management services to investors focusing on private equity funds, infrastructure development funds, co-investments funds, constructivist equity funds, and real estate and credit funds. Patria Investments Limited was founded in 1994 and is headquartered in Grand Cayman, the Cayman Islands.

Great Elm Capital Company Profile (Get Rating)

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.

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