Bain Capital Specialty Finance (NYSE:BCSF) vs. Eagle Point Credit (NYSE:ECC) Head to Head Comparison

Eagle Point Credit (NYSE:ECC) and Bain Capital Specialty Finance (NYSE:BCSF) are both small-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitability, dividends, earnings, risk, valuation, analyst recommendations and institutional ownership.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Eagle Point Credit	-84.29%	-1.83%	-0.99%
Bain Capital Specialty Finance	24.22%	10.40%	4.33%

Institutional & Insider Ownership

19.5% of Eagle Point Credit shares are owned by institutional investors. 0.3% of Eagle Point Credit shares are owned by insiders. Comparatively, 0.6% of Bain Capital Specialty Finance shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Risk & Volatility

Eagle Point Credit has a beta of 0.38, indicating that its stock price is 62% less volatile than the S&P 500. Comparatively, Bain Capital Specialty Finance has a beta of 0.6, indicating that its stock price is 40% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and price targets for Eagle Point Credit and Bain Capital Specialty Finance, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Eagle Point Credit	0	2	2	0	2.50
Bain Capital Specialty Finance	1	3	0	0	1.75

Eagle Point Credit presently has a consensus price target of $4.62, indicating a potential upside of 49.43%. Bain Capital Specialty Finance has a consensus price target of $12.60, indicating a potential upside of 18.03%. Given Eagle Point Credit’s stronger consensus rating and higher possible upside, analysts clearly believe Eagle Point Credit is more favorable than Bain Capital Specialty Finance.

Dividends

Eagle Point Credit pays an annual dividend of $1.20 per share and has a dividend yield of 38.8%. Bain Capital Specialty Finance pays an annual dividend of $1.68 per share and has a dividend yield of 15.7%. Eagle Point Credit pays out 196.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Bain Capital Specialty Finance pays out 169.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Bain Capital Specialty Finance has increased its dividend for 4 consecutive years.

Valuation and Earnings

This table compares Eagle Point Credit and Bain Capital Specialty Finance”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Eagle Point Credit	$203.99 million	2.01	-$115.00 million	$0.61	5.07
Bain Capital Specialty Finance	$273.24 million	2.53	$98.76 million	$0.99	10.78

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

Summary

Bain Capital Specialty Finance beats Eagle Point Credit on 12 of the 17 factors compared between the two stocks.

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.

About Bain Capital Specialty Finance

Bain Capital Specialty Finance, Inc. is business development company specializing in direct loans to middle-market companies. The fund seeks to invest in senior investments with a first or second lien on collateral, senior first lien, stretch senior, senior second lien, unitranche, mezzanine debt, junior securities, other junior investments, and secondary purchases of assets or portfolios that primarily consist of middle-market corporate debt. It typically invests in companies with EBITDA between $10 million and $150 million.