Contrasting Lazard (NYSE:LAZ) & Eagle Point Credit (NYSE:ECC)

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

Institutional & Insider Ownership

54.8% of Lazard shares are owned by institutional investors. Comparatively, 19.5% of Eagle Point Credit shares are owned by institutional investors. 0.9% of Lazard shares are owned by company insiders. Comparatively, 0.3% of Eagle Point Credit shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Volatility & Risk

Lazard has a beta of 1.47, meaning that its stock price is 47% more volatile than the S&P 500. Comparatively, Eagle Point Credit has a beta of 0.38, meaning that its stock price is 62% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and price targets for Lazard and Eagle Point Credit, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lazard	2	4	4	0	2.20
Eagle Point Credit	0	2	2	0	2.50

Lazard presently has a consensus target price of $46.25, suggesting a potential upside of 27.92%. Eagle Point Credit has a consensus target price of $3.75, suggesting a potential upside of 29.98%. Given Eagle Point Credit’s stronger consensus rating and higher probable upside, analysts clearly believe Eagle Point Credit is more favorable than Lazard.

Valuation and Earnings

This table compares Lazard and Eagle Point Credit”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lazard	$3.10 billion	1.29	$236.83 million	$2.04	17.72
Eagle Point Credit	-$158.23 million	-2.41	-$115.00 million	$0.61	4.73

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Lazard	6.95%	23.58%	4.63%
Eagle Point Credit	-84.29%	-1.83%	-0.99%

Dividends

Lazard pays an annual dividend of $2.00 per share and has a dividend yield of 5.5%. Eagle Point Credit pays an annual dividend of $1.04 per share and has a dividend yield of 36.0%. Lazard pays out 98.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Eagle Point Credit pays out 170.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

Lazard beats Eagle Point Credit on 13 of the 16 factors compared between the two stocks.

About Lazard

Lazard, Inc., together with its subsidiaries, operates as a financial advisory and asset management firm in North and South America, Europe, the Middle East, Asia, and Australia. It operates in two segments, Financial Advisory and Asset Management. The Financial Advisory segment offers financial advisory services, such as mergers and acquisitions, capital markets, shareholder, sovereign, geopolitical advisory, and other strategic advisory services, as well as restructuring and liability management, and capital raising and placement services. This segment offers its services to corporate, partnership, institutional, government, sovereign, and individual clients to various industry areas, including consumers, financial institutions, healthcare and life sciences, industrials, power and energy/infrastructure, real estate, technology, telecommunication, and media and entertainment. The Asset Management segment offers a range of investment solutions; investment and wealth management services in equity and fixed income strategies; asset allocation strategies; and alternative investments and private equity funds to corporations, public funds, sovereign entities, endowments and foundations, labor funds, financial intermediaries, and private clients. Lazard, Inc. was incorporated in 1848 and is headquartered in New York, New York.

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.