Great Elm Capital (GECC) versus Hercules Capital (NYSE:HTGC) Financial Survey

Hercules Capital (NYSE: HTGC) and Great Elm Capital (NASDAQ:GECC) are both small-cap financials companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, profitability, institutional ownership, valuation, dividends, analyst recommendations and risk.

Profitability

This table compares Hercules Capital and Great Elm Capital’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hercules Capital 39.73% 12.93% 6.75%
Great Elm Capital N/A N/A N/A

Analyst Recommendations

This is a breakdown of recent ratings for Hercules Capital and Great Elm Capital, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hercules Capital 0 2 9 0 2.82
Great Elm Capital 0 1 2 0 2.67

Hercules Capital currently has a consensus target price of $14.38, indicating a potential upside of 14.45%. Great Elm Capital has a consensus target price of $13.33, indicating a potential upside of 34.82%. Given Great Elm Capital’s higher probable upside, analysts plainly believe Great Elm Capital is more favorable than Hercules Capital.

Valuation and Earnings

This table compares Hercules Capital and Great Elm Capital’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hercules Capital $175.05 million 6.04 $68.70 million $0.91 13.80
Great Elm Capital $5.83 million 18.10 -$17.87 million N/A N/A

Hercules Capital has higher revenue and earnings than Great Elm Capital.

Dividends

Hercules Capital pays an annual dividend of $1.24 per share and has a dividend yield of 9.9%. Great Elm Capital pays an annual dividend of $1.00 per share and has a dividend yield of 10.1%. Hercules Capital pays out 136.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Institutional and Insider Ownership

39.0% of Hercules Capital shares are owned by institutional investors. Comparatively, 21.5% of Great Elm Capital shares are owned by institutional investors. 3.2% of Hercules Capital shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

Hercules Capital beats Great Elm Capital on 9 of the 13 factors compared between the two stocks.

Hercules Capital Company Profile

Hercules Capital, Inc. is a specialty finance company. The Company is an internally managed, non-diversified, closed-end investment company. The Company focuses on providing senior secured venture growth loans to venture capital-backed companies in a range of technology, life sciences, and sustainable and renewable technology industries. The Company’s investment objective is to maximize its portfolio total return by generating current income from its debt investments and capital appreciation from its warrant and equity-related investments. The Company’s primary business objectives are to increase its net income, net operating income and net asset value (NAV) by investing in structured debt with warrants and equity of venture capital-backed companies in technology-related industries with attractive current yields and the potential for equity appreciation and realized gains. The Company focuses its investments in companies active in the technology industry sub-sectors.

Receive News & Ratings for Hercules Capital Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Hercules Capital and related companies with MarketBeat.com's FREE daily email newsletter.

Leave a Reply