Critical Comparison: Orix Corp Ads (NYSE:IX) and Pearl Diver Credit (NYSE:PDCC)

Pearl Diver Credit (NYSE:PDCC) and Orix Corp Ads (NYSE:IX) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, analyst recommendations, valuation, profitability, institutional ownership, risk and earnings.

Analyst Recommendations

This is a breakdown of current ratings for Pearl Diver Credit and Orix Corp Ads, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Pearl Diver Credit	0	0	1	0	3.00
Orix Corp Ads	0	1	1	0	2.50

Profitability

This table compares Pearl Diver Credit and Orix Corp Ads’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Pearl Diver Credit	N/A	N/A	N/A
Orix Corp Ads	18.02%	13.11%	3.38%

Dividends

Pearl Diver Credit pays an annual dividend of $1.56 per share and has a dividend yield of 19.3%. Orix Corp Ads pays an annual dividend of $0.58 per share and has a dividend yield of 1.6%. Pearl Diver Credit pays out -34.7% of its earnings in the form of a dividend. Orix Corp Ads pays out 16.0% 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. Pearl Diver Credit is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider and Institutional Ownership

1.7% of Orix Corp Ads shares are owned by institutional investors. 0.1% of Orix Corp Ads shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Pearl Diver Credit and Orix Corp Ads”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Pearl Diver Credit	-$28.47 million	-1.93	-$30.62 million	($4.50)	-1.79
Orix Corp Ads	$22.13 billion	1.83	$2.95 billion	$3.62	10.10

Orix Corp Ads has higher revenue and earnings than Pearl Diver Credit. Pearl Diver Credit is trading at a lower price-to-earnings ratio than Orix Corp Ads, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Pearl Diver Credit has a beta of 0.59, suggesting that its share price is 41% less volatile than the S&P 500. Comparatively, Orix Corp Ads has a beta of 0.9, suggesting that its share price is 10% less volatile than the S&P 500.

Summary

Orix Corp Ads beats Pearl Diver Credit on 11 of the 14 factors compared between the two stocks.

About Pearl Diver Credit

Pearl Diver Credit Company Inc. is a newly organized, externally managed, non-diversified, closed-end management investment company. Its primary investment objective is to maximize its portfolio’s total return, with a secondary objective of generating high current income. Pearl Diver Credit Company Inc. is based in NEW YORK.

About Orix Corp Ads

ORIX Corporation provides diversified financial services in Japan, the United States, Asia, Europe, Australasia, and the Middle East. The company's Corporate Financial Services and Maintenance Leasing segment is involved in the finance and fee; leasing and rental of automobiles, electronic measuring instruments, and ICT-related equipment businesses; and provision of life insurance and environment and energy-related products and services. Its Real Estate segment develops, rents, and manages real estate properties; operates facilities; real estate asset management; manages residential condominiums and office building; and provides construction contracting, real estate brokerage, and real estate investment advisory services, as well as operates hotels and Japanese inns. The company's PE Investment and Concession segment engages in the private equity (PE) investment and concession businesses. Its Environment and Energy segment provides renewable energy; ESCO; retails electric power; sells solar panels and battery electricity storage systems; and recycling and waste management services, as well as generates solar power. The company's Insurance segment sells life insurance products through agents, banks, and other financial institutions, as well as face-to-face and online. Its Banking and Credit segment provides banking and consumer finance services. The company's Aircraft and Ships segment engages in the aircraft leasing and management, and ship-related finance and investment businesses. Its ORIX USA segment offers finance, investment, and asset management services. The company's ORIX Europe segment provides equity and fixed income asset management services. Its Asia and Australia segment offers finance and investment businesses. The company was formerly known as Orient Leasing Co., Ltd. and changed its name to ORIX Corporation in 1989. ORIX Corporation was incorporated in 1950 and is headquartered in Tokyo, Japan.