Head-To-Head Comparison: THL Credit (TCRD) & Elron Electronic Industries (ELRNF)

THL Credit (NASDAQ:TCRD) and Elron Electronic Industries (OTCMKTS:ELRNF) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, dividends, profitability, institutional ownership, analyst recommendations, risk and valuation.

Dividends

THL Credit pays an annual dividend of $1.08 per share and has a dividend yield of 14.1%. Elron Electronic Industries does not pay a dividend. THL Credit pays out 89.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Earnings and Valuation

This table compares THL Credit and Elron Electronic Industries’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
THL Credit $78.77 million 3.17 -$7.90 million $1.21 6.32
Elron Electronic Industries $11.97 million 8.27 -$25.48 million N/A N/A

THL Credit has higher revenue and earnings than Elron Electronic Industries.

Analyst Recommendations

This is a breakdown of current ratings and price targets for THL Credit and Elron Electronic Industries, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
THL Credit 0 4 0 0 2.00
Elron Electronic Industries 0 0 0 0 N/A

THL Credit presently has a consensus price target of $10.00, suggesting a potential upside of 30.72%. Given THL Credit’s higher probable upside, research analysts clearly believe THL Credit is more favorable than Elron Electronic Industries.

Insider & Institutional Ownership

40.2% of THL Credit shares are held by institutional investors. 0.5% of THL Credit shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares THL Credit and Elron Electronic Industries’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
THL Credit -8.89% 11.15% 6.15%
Elron Electronic Industries N/A -5.02% -4.66%

Volatility and Risk

THL Credit has a beta of 1.07, indicating that its share price is 7% more volatile than the S&P 500. Comparatively, Elron Electronic Industries has a beta of 0.05, indicating that its share price is 95% less volatile than the S&P 500.

Summary

THL Credit beats Elron Electronic Industries on 9 of the 12 factors compared between the two stocks.

About THL Credit

THL Credit, Inc. is a business development company specializing in direct and fund of fund investments. The fund seeks to invest in debt and equity securities of middle market companies. It seeks to invest in PIPES, growth, acquisition, market or product expansion, recapitalization, mature, and change of control transactions in both sponsored and unsponsored issuers. The fund does not intend to invest in start-up companies, operationally distressed situations, or companies with speculative business plans. The fund invests primarily in debt securities, including unsecured subordinated or mezzanine debt and second lien secured debt, which may include an associated equity component such as warrants, preferred stock, options to buy minority interest, and other similar securities. Its investments may also include high-yield bonds, private equity investments, securities of public companies that are broadly traded, and securities of non-United States companies. It seeks to invest in outsourced business services, healthcare, financials, retailing, media, and consumer discretionary. The fund may make direct equity investments, including equity investments into or through funds, and also selectively invest in syndicated first lien secured loans, including unitranche investments. It seeks to invest between $10 million and $25 million of capital per transaction in companies with annual revenues ranging from $25 million to $500 million and annual EBITDA between $5 million and $25 million. The fund prefers to be a lead or sole investor in a transaction.

About Elron Electronic Industries

Elron Electronic Industries Ltd., through its subsidiaries, provides technology products in the medical devices and cyber fields. The company offers BrainsGate, a minimally invasive treatment for ischemic stroke; Pocared, an automated microbiology lab system for infectious diseases diagnosis; CartiHeal implants for cartilage and bone repair in weight bearing joints; Notal Vision, a remote monitoring of patients at risk of vision loss from age-related macular degeneration; cyber intelligence platform that detects and defuses threats before they become cyberattacks; Alcide, a security and management tools for hybrid data centers; and SecuredTouch a behavioral biometrics for mobile transactions. It also provides Ironscales, an automated phishing prevention, detection, and response platform; Cynerio, a connected medical device; Kindite, a cloud encryption solution; OpenLegacy, a platform that enables the digital transformation process; PLYmedia, a platform for ad networks; Aqwise, a biological water and wastewater treatment solutions for the industrial and municipal markets; and Atlantium, a water disinfection solution. The company was founded in 1961 and is based in Tel Aviv, Israel. Elron Electronic Industries Ltd. is a subsidiary of Discount Investment Corporation Limited.

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