Och-Ziff Capital Management Group (OZM) versus Great Elm Capital (GECC) Critical Survey

Och-Ziff Capital Management Group (NYSE:OZM) and Great Elm Capital (NASDAQ:GECC) are both small-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, institutional ownership, profitability, analyst recommendations, valuation and dividends.

Dividends

Och-Ziff Capital Management Group pays an annual dividend of $0.92 per share and has a dividend yield of 6.1%. Great Elm Capital pays an annual dividend of $1.00 per share and has a dividend yield of 12.0%. Och-Ziff Capital Management Group pays out 78.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Great Elm Capital pays out 69.4% of its earnings in the form of a dividend. Great Elm Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility and Risk

Och-Ziff Capital Management Group has a beta of 1.4, indicating that its share price is 40% more volatile than the S&P 500. Comparatively, Great Elm Capital has a beta of 0.81, indicating that its share price is 19% less volatile than the S&P 500.

Profitability

This table compares Och-Ziff Capital Management Group and Great Elm Capital’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Och-Ziff Capital Management Group -4.79% -1,788.13% 4.47%
Great Elm Capital -32.44% 12.54% 5.51%

Valuation and Earnings

This table compares Och-Ziff Capital Management Group 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
Och-Ziff Capital Management Group $507.22 million 1.48 -$24.28 million $1.17 12.87
Great Elm Capital $27.75 million 3.21 -$9.01 million $1.44 5.81

Great Elm Capital has lower revenue, but higher earnings than Och-Ziff Capital Management Group. Great Elm Capital is trading at a lower price-to-earnings ratio than Och-Ziff Capital Management Group, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

13.0% of Great Elm Capital shares are owned by institutional investors. 60.8% of Och-Ziff Capital Management Group shares are owned by insiders. Comparatively, 1.4% of Great Elm Capital shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and recommmendations for Och-Ziff Capital Management Group and Great Elm Capital, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Och-Ziff Capital Management Group 0 0 1 0 3.00
Great Elm Capital 0 0 0 0 N/A

Och-Ziff Capital Management Group currently has a consensus price target of $30.00, indicating a potential upside of 99.20%. Given Och-Ziff Capital Management Group’s higher possible upside, equities analysts plainly believe Och-Ziff Capital Management Group is more favorable than Great Elm Capital.

Summary

Great Elm Capital beats Och-Ziff Capital Management Group on 8 of the 15 factors compared between the two stocks.

Och-Ziff Capital Management Group Company Profile

Och-Ziff Capital Management Group LLC is a publicly owned hedge fund sponsor. The firm provides investment advisory services for its clients. It primarily caters to institutional investors which include pension funds, fund-of-funds, foundations and endowments, corporations and other institutions, private banks and family offices. The firm invests in equity and alternative markets across the world. It employs quantitative and qualitative analysis to make its investments. For its multi-strategy portfolios, the firm employs strategies like convertible and derivative arbitrage, corporate credit, long/short equity special situations, buyout investments, merger arbitrage, private investments, and structured credit. It also invests in real estate and traditional real estate assets including multifamily, office, hotel and retail, loans, portfolio acquisitions, loan pools, operating companies, structured debt products, public securities, and non-traditional real estate assets including gaming, distressed land and residential, cell towers, parking, golf, debt and senior housing. For private equity investments, it considers investments in a variety of special situations that seek to realize value through strategic sales or initial public offerings. The firm typically invests in the energy investments. It prefers to invest in United States. It also manages a buyout fund, Och-Ziff Energy Fund. Och-Ziff Capital Management Group LLC was founded in 1994 and is based New York City with additional offices in Houston, Texas, London, United Kingdom, Hong Kong, Tokyo, Japan, Bangalore, India, Singapore, and Beijing, China.

Great Elm Capital Company Profile

Great Elm Capital Corporation is a business development company which specializes in loan and mezzanine, middle market investments. The fund prefers to invest in media, commercial services and supplies, healthcare, telecommunication services, communications equipment. It typically makes equity investments between $3 million and $10 million in companies with revenues between $3 million and $75 million.

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