Prospect Capital (NASDAQ:PSEC) versus Silvercrest Asset Management Group (NASDAQ:SAMG) Head-To-Head Analysis

Prospect Capital (NASDAQ:PSEC) and Silvercrest Asset Management Group (NASDAQ:SAMG) are both small-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their dividends, risk, valuation, earnings, institutional ownership, analyst recommendations and profitability.

Earnings & Valuation

This table compares Prospect Capital and Silvercrest Asset Management Group”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Prospect Capital	$719.44 million	1.79	-$469.92 million	($1.34)	-2.08
Silvercrest Asset Management Group	$123.65 million	1.65	$9.53 million	$0.88	18.42

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

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Prospect Capital and Silvercrest Asset Management Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Prospect Capital	1	0	0	0	1.00
Silvercrest Asset Management Group	0	0	0	0	0.00

Prospect Capital currently has a consensus price target of $2.50, suggesting a potential downside of 10.39%. Given Prospect Capital’s stronger consensus rating and higher probable upside, equities analysts clearly believe Prospect Capital is more favorable than Silvercrest Asset Management Group.

Insider and Institutional Ownership

9.1% of Prospect Capital shares are owned by institutional investors. Comparatively, 47.6% of Silvercrest Asset Management Group shares are owned by institutional investors. 28.3% of Prospect Capital shares are owned by insiders. Comparatively, 20.4% of Silvercrest Asset Management Group shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Prospect Capital and Silvercrest Asset Management Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Prospect Capital	-69.68%	12.14%	5.59%
Silvercrest Asset Management Group	6.63%	12.03%	7.99%

Dividends

Prospect Capital pays an annual dividend of $0.54 per share and has a dividend yield of 19.4%. Silvercrest Asset Management Group pays an annual dividend of $0.84 per share and has a dividend yield of 5.2%. Prospect Capital pays out -40.3% of its earnings in the form of a dividend. Silvercrest Asset Management Group pays out 95.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Silvercrest Asset Management Group has increased its dividend for 1 consecutive years. Prospect Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility and Risk

Prospect Capital has a beta of 0.85, meaning that its share price is 15% less volatile than the S&P 500. Comparatively, Silvercrest Asset Management Group has a beta of 0.81, meaning that its share price is 19% less volatile than the S&P 500.

Summary

Prospect Capital beats Silvercrest Asset Management Group on 9 of the 16 factors compared between the two stocks.

About Prospect Capital

Prospect Capital Corporation is a business development company. It specializes in middle market, mature, mezzanine finance, later stage, emerging growth, leveraged buyouts, refinancing, acquisitions, recapitalizations, turnaround, growth capital, development, capital expenditures and subordinated debt tranches of collateralized loan obligations, cash flow term loans, market place lending and bridge transactions. It also makes real estate investments particularly in multi-family residential real estate asset class. The fund makes secured debt, senior debt, senior and secured term loans, unitranche debt, first-lien and second lien, private debt, private equity, mezzanine debt, and equity investments in private and microcap public businesses. It focuses on both primary origination and secondary loans/portfolios and invests in situations like debt financings for private equity sponsors, acquisitions, dividend recapitalizations, growth financings, bridge loans, cash flow term loans, real estate financings/investments. It also focuses on investing in small-sized and medium-sized private companies rather than large public companies. The fund typically invests across all industry sectors, with a particular expertise in the energy and industrial sectors. It invests in aerospace and defense, chemicals, conglomerate services, consumer services, ecological, electronics, financial services, machinery, manufacturing, media, pharmaceuticals, retail, software, specialty minerals, textiles and leather, transportation, oil and gas production, coal production, materials, industrials, consumer discretionary, information technology, utilities, pipeline, storage, power generation and distribution, renewable and clean energy, oilfield services, healthcare, food and beverage, education, business services, and other select sectors. It prefers to invest in the United States and Canada. The fund seeks to invest between $10 million to $500 million per transaction in companies with EBITDA between $5 million and $150 million, sales value between $25 million and $500 million, and enterprise value between $5 million and $1000 million. It fund also co-invests for larger deals. The fund seeks control acquisitions by providing multiple levels of the capital structure. The fund focuses on sole, agented, club, or syndicated deals.

About Silvercrest Asset Management Group

Silvercrest Asset Management Group Inc., a wealth management firm, provides financial advisory and related family office services in the United States. The company serves ultra-high net worth individuals and families, as well as their trusts; endowments; foundations; and other institutional investors. It also manages funds of funds and other investment funds. The company was founded in 2002 and is headquartered in New York, New York.