Financial Review: Westwood Holdings Group (NYSE:WHG) & Sound Point Meridian Capital (NYSE:SPMC)

Sound Point Meridian Capital (NYSE:SPMC) and Westwood Holdings Group (NYSE:WHG) are both small-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, earnings, analyst recommendations, institutional ownership, dividends, valuation and risk.

Dividends

Sound Point Meridian Capital pays an annual dividend of $3.00 per share and has a dividend yield of 20.0%. Westwood Holdings Group pays an annual dividend of $0.60 per share and has a dividend yield of 3.9%. Sound Point Meridian Capital pays out 1,500.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Westwood Holdings Group pays out 73.2% of its earnings in the form of a dividend.

Institutional & Insider Ownership

56.6% of Westwood Holdings Group shares are owned by institutional investors. 8.2% of Westwood Holdings Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Sound Point Meridian Capital and Westwood Holdings Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sound Point Meridian Capital	N/A	N/A	N/A
Westwood Holdings Group	3.92%	5.19%	4.33%

Analyst Recommendations

This is a summary of current ratings and target prices for Sound Point Meridian Capital and Westwood Holdings Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sound Point Meridian Capital	0	1	1	1	3.00
Westwood Holdings Group	0	0	1	0	3.00

Sound Point Meridian Capital currently has a consensus target price of $18.63, suggesting a potential upside of 24.04%. Given Sound Point Meridian Capital’s higher probable upside, equities research analysts plainly believe Sound Point Meridian Capital is more favorable than Westwood Holdings Group.

Risk and Volatility

Sound Point Meridian Capital has a beta of 0.2, indicating that its stock price is 80% less volatile than the S&P 500. Comparatively, Westwood Holdings Group has a beta of 0.95, indicating that its stock price is 5% less volatile than the S&P 500.

Valuation and Earnings

This table compares Sound Point Meridian Capital and Westwood Holdings Group”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sound Point Meridian Capital	N/A	N/A	N/A	$0.20	75.08
Westwood Holdings Group	$96.24 million	1.52	$2.21 million	$0.82	18.98

Westwood Holdings Group has higher revenue and earnings than Sound Point Meridian Capital. Westwood Holdings Group is trading at a lower price-to-earnings ratio than Sound Point Meridian Capital, indicating that it is currently the more affordable of the two stocks.

Summary

Westwood Holdings Group beats Sound Point Meridian Capital on 9 of the 13 factors compared between the two stocks.

About Sound Point Meridian Capital

Sound Point Meridian Capital Inc. is an externally managed, non-diversified closed-end management investment company. Its investment objective is to generate high current income, with a secondary objective to generate capital appreciation, by investing primarily in third-party collateralized loan obligation equity and mezzanine tranches. Sound Point Meridian Capital Inc. is based in NEW YORK.

About Westwood Holdings Group

Westwood Holdings Group, Inc., through its subsidiaries, manages investment assets and provides services for its clients. The company operates in two segments, Advisory and Trust. The Advisory segment provides investment advisory services to corporate retirement plans, public retirement plans, endowments, foundations, individuals, and the Westwood Funds; and investment sub-advisory services to mutual funds, pooled investment vehicles, and its Trust segment. The Trust segment offers trust and custodial services; and participates in common trust funds that it sponsors to institutions and high net worth individuals. Westwood Holdings Group, Inc. was founded in 1983 and is based in Dallas, Texas.