Critical Contrast: OFS Credit (NASDAQ:OCCI) & Eagle Point Credit (NYSE:ECC)

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

Analyst Ratings

This is a summary of current ratings and recommmendations for Eagle Point Credit and OFS Credit, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Eagle Point Credit	0	2	3	1	2.83
OFS Credit	0	0	0	0	0.00

Eagle Point Credit currently has a consensus price target of $7.46, indicating a potential upside of 26.31%. Given Eagle Point Credit’s stronger consensus rating and higher possible upside, equities analysts clearly believe Eagle Point Credit is more favorable than OFS Credit.

Volatility & Risk

Eagle Point Credit has a beta of 0.27, meaning that its stock price is 73% less volatile than the S&P 500. Comparatively, OFS Credit has a beta of 0.59, meaning that its stock price is 41% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Eagle Point Credit	12.33%	13.47%	8.14%
OFS Credit	N/A	N/A	N/A

Insider and Institutional Ownership

19.5% of Eagle Point Credit shares are held by institutional investors. Comparatively, 23.8% of OFS Credit shares are held by institutional investors. 0.2% of Eagle Point Credit shares are held by insiders. Comparatively, 1.0% of OFS Credit shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Dividends

Eagle Point Credit pays an annual dividend of $1.82 per share and has a dividend yield of 30.8%. OFS Credit pays an annual dividend of $1.49 per share and has a dividend yield of 29.7%. Eagle Point Credit pays out 957.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. OFS Credit pays out -402.7% of its earnings in the form of a dividend.

Valuation & Earnings

This table compares Eagle Point Credit and OFS Credit”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Eagle Point Credit	$31.03 million	24.04	$85.49 million	$0.19	31.08
OFS Credit	-$5.74 million	-13.76	-$5.83 million	($0.37)	-13.54

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

Summary

Eagle Point Credit beats OFS Credit on 13 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 OFS Credit

OFS Credit Company, Inc. is a fund of OFS Advisor.