Head-To-Head Analysis: Cannae (NYSE:CNNE) vs. Great Elm Capital Group (NASDAQ:GECC)

Great Elm Capital Group (NASDAQ:GECC) and Cannae (NYSE:CNNE) are both small-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their institutional ownership, profitability, risk, earnings, analyst recommendations, dividends and valuation.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Great Elm Capital Group and Cannae, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Great Elm Capital Group	1	2	0	0	1.67
Cannae	1	1	2	0	2.25

Great Elm Capital Group currently has a consensus target price of $10.50, suggesting a potential upside of 46.44%. Cannae has a consensus target price of $20.50, suggesting a potential upside of 30.32%. Given Great Elm Capital Group’s higher possible upside, research analysts plainly believe Great Elm Capital Group is more favorable than Cannae.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Great Elm Capital Group	-17.08%	10.97%	3.95%
Cannae	-108.39%	-23.16%	-18.38%

Risk & Volatility

Great Elm Capital Group has a beta of 0.64, indicating that its share price is 36% less volatile than the S&P 500. Comparatively, Cannae has a beta of 1.11, indicating that its share price is 11% more volatile than the S&P 500.

Valuation and Earnings

This table compares Great Elm Capital Group and Cannae”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Great Elm Capital Group	$39.32 million	2.55	$3.55 million	($0.56)	-12.80
Cannae	$452.50 million	1.71	-$304.60 million	($7.73)	-2.03

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

Dividends

Great Elm Capital Group pays an annual dividend of $1.48 per share and has a dividend yield of 20.6%. Cannae pays an annual dividend of $0.60 per share and has a dividend yield of 3.8%. Great Elm Capital Group pays out -264.3% of its earnings in the form of a dividend. Cannae pays out -7.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Great Elm Capital Group has increased its dividend for 2 consecutive years. Great Elm Capital Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

38.8% of Great Elm Capital Group shares are owned by institutional investors. Comparatively, 88.1% of Cannae shares are owned by institutional investors. 8.7% of Great Elm Capital Group shares are owned by company insiders. Comparatively, 10.9% of Cannae shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

Great Elm Capital Group beats Cannae on 10 of the 17 factors compared between the two stocks.

About Great Elm Capital Group

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.

About Cannae

Cannae Holdings, Inc. is a principal investment firm. The firm primarily invests in restaurants, technology enabled healthcare services, financial services and more. It takes both minority and majority stakes. Cannae Holdings, Inc. was founded in 2014 and is based in Las Vegas, Nevada.