Contrasting Eagle Point Credit (NYSE:ECC) and B. Riley Financial (NASDAQ:RILY)

B. Riley Financial (NASDAQ:RILY) and Eagle Point Credit (NYSE:ECC) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, earnings, valuation, risk, profitability and dividends.

Earnings and Valuation

This table compares B. Riley Financial and Eagle Point Credit”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
B. Riley Financial	$967.60 million	0.29	$307.42 million	$12.70	0.56
Eagle Point Credit	$203.99 million	2.53	-$115.00 million	$0.61	6.40

B. Riley Financial has higher revenue and earnings than Eagle Point Credit. B. Riley Financial 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.

Volatility and Risk

B. Riley Financial has a beta of 1.22, indicating that its share price is 22% more volatile than the S&P 500. Comparatively, Eagle Point Credit has a beta of 0.36, indicating that its share price is 64% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
B. Riley Financial	35.88%	39,260.09%	22.99%
Eagle Point Credit	-84.29%	-1.83%	-0.99%

Analyst Ratings

This is a breakdown of recent ratings and target prices for B. Riley Financial and Eagle Point Credit, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
B. Riley Financial	1	0	0	0	1.00
Eagle Point Credit	0	2	3	0	2.60

Eagle Point Credit has a consensus price target of $6.50, indicating a potential upside of 66.45%. Given Eagle Point Credit’s stronger consensus rating and higher probable upside, analysts plainly believe Eagle Point Credit is more favorable than B. Riley Financial.

Insider and Institutional Ownership

50.2% of B. Riley Financial shares are held by institutional investors. Comparatively, 19.5% of Eagle Point Credit shares are held by institutional investors. 27.8% of B. Riley Financial shares are held by insiders. Comparatively, 0.3% of Eagle Point Credit shares are held by 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.

Summary

B. Riley Financial beats Eagle Point Credit on 9 of the 14 factors compared between the two stocks.

About B. Riley Financial

B. Riley Financial, Inc., through its subsidiaries, provides financial services to corporate, institutional, and high net worth clients in North America, Australia, the Asia Pacific, and Europe. The company operates through six segments: Capital Markets, Wealth Management, Financial Consulting, Auction and Liquidation, Communications, and Consumer. The Capital Markets segments offers investment banking, equity research, institutional sales and trading, securities lending, fund and asset management, direct lending, venture capital, proprietary trading, and investment services; merger and acquisition, restructuring advisory, and recapitalization services; public and private equity offerings; and debt financing solutions. This segment also trades in equity securities. The Wealth Management segment provides wealth management and tax services. The Financial Consulting segment offers bankruptcy restructuring and turnaround management, forensic accounting and litigation support, valuation and appraisal, and real estate services. The Auction and Liquidation Segment provides auction and liquidation services. The Communications segment offers dial-up, mobile broadband and digital subscriber line services under the NetZero and Juno brands; cloud communication services; VoIP cloud-based technology and communication devices and subscription services through magicJack; and mobile phone voice, text, and data services and devices through Marconi Wireless. The Consumer segment sells laptop and computer accessories. The company was formerly known as Great American Group, Inc. and changed its name to B. Riley Financial, Inc. in November 2014. B. Riley Financial, Inc. was founded in 1973 and is headquartered in Los Angeles, California.

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.