American Express (NYSE: AXP) and Harvest Capital Credit (NASDAQ:HCAP) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, valuation, analyst recommendations, risk, dividends, profitability and institutional ownership.
Insider & Institutional Ownership
82.8% of American Express shares are owned by institutional investors. Comparatively, 8.7% of Harvest Capital Credit shares are owned by institutional investors. 0.2% of American Express shares are owned by company insiders. Comparatively, 9.3% of Harvest Capital Credit shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
This is a summary of current recommendations for American Express and Harvest Capital Credit, as provided by MarketBeat.com.
||Strong Buy Ratings
|Harvest Capital Credit
American Express currently has a consensus price target of $107.26, indicating a potential upside of 8.86%. Harvest Capital Credit has a consensus price target of $12.00, indicating a potential upside of 13.21%. Given Harvest Capital Credit’s higher possible upside, analysts plainly believe Harvest Capital Credit is more favorable than American Express.
Risk & Volatility
American Express has a beta of 1.1, suggesting that its stock price is 10% more volatile than the S&P 500. Comparatively, Harvest Capital Credit has a beta of 0.74, suggesting that its stock price is 26% less volatile than the S&P 500.
This table compares American Express and Harvest Capital Credit’s net margins, return on equity and return on assets.
||Return on Equity
||Return on Assets
|Harvest Capital Credit
American Express pays an annual dividend of $1.40 per share and has a dividend yield of 1.4%. Harvest Capital Credit pays an annual dividend of $1.14 per share and has a dividend yield of 10.8%. American Express pays out 23.9% of its earnings in the form of 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. American Express has raised its dividend for 6 consecutive years.
Earnings & Valuation
This table compares American Express and Harvest Capital Credit’s top-line revenue, earnings per share and valuation.
||Earnings Per Share
|Harvest Capital Credit
American Express has higher revenue and earnings than Harvest Capital Credit. Harvest Capital Credit is trading at a lower price-to-earnings ratio than American Express, indicating that it is currently the more affordable of the two stocks.
American Express beats Harvest Capital Credit on 12 of the 17 factors compared between the two stocks.
About American Express
American Express Company, together with its subsidiaries, provides charge and credit payment card products and travel-related services to consumers and businesses worldwide. It operates through four segments: U.S. Consumer Services, International Consumer and Network Services, Global Commercial Services, and Global Merchant Services. The company's products and services include charge and credit card products, as well as other payment and financing products; network services; expense management products and services; travel-related services; and stored value/prepaid products. Its products and services also comprise merchant acquisition and processing, servicing and settlement, merchant financing, point-of-sale marketing, and information products and services for merchants; and fraud prevention services, as well as the design and operation of customer loyalty programs. The company sells its products and services to consumers, small businesses, mid-sized companies, and large corporations through online applications, direct mail, in-house teams, third-party vendors, and direct response advertising. American Express Company was founded in 1850 and is headquartered in New York, New York.
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.
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