Contrasting ONEX (OTCMKTS:ONEXF) and Eagle Point Credit (NYSE:ECC)

ONEX (OTCMKTS:ONEXF) and Eagle Point Credit (NYSE:ECC) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their dividends, valuation, profitability, earnings, institutional ownership, analyst recommendations and risk.

Insider & Institutional Ownership

0.7% of ONEX shares are owned by institutional investors. Comparatively, 19.5% of Eagle Point Credit shares are owned by institutional investors. 0.2% of Eagle Point Credit shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Volatility & Risk

ONEX has a beta of 1.22, indicating that its share price is 22% more volatile than the S&P 500. Comparatively, Eagle Point Credit has a beta of 0.28, indicating that its share price is 72% less volatile than the S&P 500.

Dividends

ONEX pays an annual dividend of $0.29 per share and has a dividend yield of 0.4%. Eagle Point Credit pays an annual dividend of $1.68 per share and has a dividend yield of 40.7%. ONEX pays out 4.7% of its earnings in the form of a dividend. Eagle Point Credit pays out 884.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Recommendations

This is a breakdown of current ratings and price targets for ONEX and Eagle Point Credit, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ONEX	0	1	2	0	2.67
Eagle Point Credit	0	2	3	1	2.83

Eagle Point Credit has a consensus target price of $7.13, indicating a potential upside of 72.73%. Given Eagle Point Credit’s stronger consensus rating and higher possible upside, analysts clearly believe Eagle Point Credit is more favorable than ONEX.

Profitability

This table compares ONEX and Eagle Point Credit’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ONEX	56.15%	5.09%	3.19%
Eagle Point Credit	12.33%	13.47%	8.14%

Earnings and Valuation

This table compares ONEX and Eagle Point Credit”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ONEX	$649.00 million	8.20	$303.00 million	$6.21	12.49
Eagle Point Credit	$179.77 million	2.90	$85.49 million	$0.19	21.71

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

Summary

Eagle Point Credit beats ONEX on 10 of the 17 factors compared between the two stocks.

About ONEX

Onex Corporation is a private equity firm specializing in acquisitions and platform acquisitions. The firm makes investments in buyouts, large- middle market, large-cap, mid-cap, and small-cap market and distressed companies. It also invests in recapitalization, growth capital, corporate carve-outs of subsidiaries and mission-critical supply divisions from multinational corporations, operational restructurings of undervalued businesses, and builds up. The firm seeks to invest in technology, electronics manufacturing services, industrial, aerospace, healthcare, retail, restaurants, industrials products, customer care services, metal services, building products, entertainment, gaming, cabinetry products, commercial vehicles, commercial and investment banking, financial services, commercial and multi-unit residential real estate. It invests in global businesses headquartered in North America, including United States and Canada, or Europe. The firm seeks to invest between $125 million and $1 billion in companies that have minimum revenues of $300 million. It does not consider size if the company is in an industry in which the firm already has presence. The firm seeks to make direct as well as co-investments through managed private equity, real estate and credit funds. It seeks to acquire a control position in its portfolio companies. Onex Corporation was founded in 1984 and is based in Toronto, Canada with additional offices in New York, New York; Englewood Cliffs, New Jersey; Boston, Massachusetts and London, United Kingdom.

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.