Head to Head Review: Eagle Point Credit (NYSE:ECC) versus Victory Capital (NASDAQ:VCTR)

Victory Capital (NASDAQ:VCTR) and Eagle Point Credit (NYSE:ECC) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, earnings, analyst recommendations, valuation, institutional ownership, dividends and risk.

Analyst Recommendations

This is a breakdown of recent recommendations for Victory Capital and Eagle Point Credit, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Victory Capital	1	4	5	0	2.40
Eagle Point Credit	1	2	3	0	2.33

Victory Capital currently has a consensus target price of $76.13, indicating a potential upside of 1.53%. Eagle Point Credit has a consensus target price of $6.67, indicating a potential upside of 65.47%. Given Eagle Point Credit’s higher possible upside, analysts plainly believe Eagle Point Credit is more favorable than Victory Capital.

Dividends

Victory Capital pays an annual dividend of $1.96 per share and has a dividend yield of 2.6%. Eagle Point Credit pays an annual dividend of $1.60 per share and has a dividend yield of 39.7%. Victory Capital pays out 48.2% of its earnings in the form of a dividend. Eagle Point Credit pays out 842.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Victory Capital has raised its dividend for 6 consecutive years.

Earnings & Valuation

This table compares Victory Capital 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
Victory Capital	$1.31 billion	3.68	$330.06 million	$4.07	18.42
Eagle Point Credit	$203.99 million	2.61	-$115.00 million	$0.19	21.21

Victory Capital has higher revenue and earnings than Eagle Point Credit. Victory Capital 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.

Risk & Volatility

Victory Capital has a beta of 1.04, meaning that its share price is 4% more volatile than the S&P 500. Comparatively, Eagle Point Credit has a beta of 0.3, meaning that its share price is 70% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Victory Capital	25.27%	21.86%	12.06%
Eagle Point Credit	12.33%	13.47%	8.14%

Institutional & Insider Ownership

87.7% of Victory Capital shares are held by institutional investors. Comparatively, 19.5% of Eagle Point Credit shares are held by institutional investors. 9.5% of Victory Capital shares are held by insiders. Comparatively, 0.2% of Eagle Point Credit shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Victory Capital beats Eagle Point Credit on 14 of the 17 factors compared between the two stocks.

About Victory Capital

Victory Capital Holdings, Inc., together with its subsidiaries, operates as an asset management company in the United States and internationally. It offers investment advisory, fund administration, fund compliance, fund transfer agent, fund distribution, and other management services. The company provides specialized investment strategies to institutions, intermediaries, retirement platforms, and individual investors. Its investment products include actively and passively managed mutual funds; rules-based and active exchange traded funds; institutional separate accounts; variable insurance products; alternative investments; and private closed-end funds; and a 529 Education Savings Plan. The company also offers strategies through third-party investment products, including mutual funds, third-party ETF model strategies, retail separately managed accounts, unified managed accounts through wrap account programs, Collective Investment Trusts, and undertakings for the collective investment in transferable securities. Victory Capital Holdings, Inc. was incorporated in 2013 and is based in San Antonio, Texas.

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.