Comparing Harvest Capital Credit (HCAP) & Elevate Credit (ELVT)

Harvest Capital Credit (NASDAQ: HCAP) and Elevate Credit (NYSE:ELVT) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, profitability, risk, earnings, analyst recommendations, institutional ownership and valuation.

Institutional & Insider Ownership

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5.7% of Harvest Capital Credit shares are held by institutional investors. Comparatively, 42.3% of Elevate Credit shares are held by institutional investors. 9.5% of Harvest Capital Credit shares are held by company insiders. Comparatively, 32.0% of Elevate Credit shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Dividends

Harvest Capital Credit pays an annual dividend of $1.14 per share and has a dividend yield of 11.1%. Elevate Credit does not pay a dividend. Harvest Capital Credit pays out 89.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares Harvest Capital Credit and Elevate Credit’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Harvest Capital Credit 8.73% 10.61% 6.62%
Elevate Credit -1.03% 6.84% 0.87%

Earnings & Valuation

This table compares Harvest Capital Credit and Elevate Credit’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Harvest Capital Credit $18.70 million 3.51 $1.63 million $1.28 8.02
Elevate Credit $673.13 million 0.47 -$6.91 million $0.16 46.81

Harvest Capital Credit has higher earnings, but lower revenue than Elevate Credit. Harvest Capital Credit is trading at a lower price-to-earnings ratio than Elevate Credit, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Harvest Capital Credit and Elevate Credit, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Harvest Capital Credit 0 2 0 0 2.00
Elevate Credit 0 2 7 0 2.78

Harvest Capital Credit presently has a consensus target price of $12.00, indicating a potential upside of 16.85%. Elevate Credit has a consensus target price of $10.50, indicating a potential upside of 40.19%. Given Elevate Credit’s stronger consensus rating and higher possible upside, analysts plainly believe Elevate Credit is more favorable than Harvest Capital Credit.

Summary

Elevate Credit beats Harvest Capital Credit on 8 of the 15 factors compared between the two stocks.

About Harvest Capital Credit

Harvest Capital Credit Corporation is an externally managed, closed-end, non-diversified management investment company. The Company operates as a business development company and provides customized financing solutions for small to mid-sized companies. Its investment objective is to generate both current income and capital appreciation by making direct investments in the form of subordinated debt, senior debt, and to a lesser extent, minority equity investments in privately-held the United States small to mid-sized companies. Its investment portfolio includes over 56.8% of senior secured term loans, 40.8% of junior secured term loans, 1.3% of equity investments and 1.1% of collateralized loan obligation (CLO) equity at fair value. It may also invest in other investments, such as loans to larger, publicly-traded companies, high-yield bonds and distressed debt securities. It may also invest in debt and equity securities issued by CLO funds. HCAP Advisors LLC is its investment adviser.

About Elevate Credit

Elevate Credit, Inc. provides online credit solutions to non-prime consumers in the United States and the United Kingdom. The company offers unsecured online installment loans and lines of credit. Its products include Rise installment loan and line of credit products; Elastic, a line of credit product; and Sunny installment loan products. Elevate Credit, Inc. was incorporated in 2014 and is headquartered in Fort Worth, Texas.

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