SEI Investments (NASDAQ:SEIC) vs. Great Elm Capital Group (NASDAQ:GECC) Financial Analysis

SEI Investments (NASDAQ:SEIC) and Great Elm Capital Group (NASDAQ:GECC) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, valuation, earnings, profitability, analyst recommendations, dividends and risk.

Dividends

SEI Investments pays an annual dividend of $1.04 per share and has a dividend yield of 1.3%. Great Elm Capital Group pays an annual dividend of $1.48 per share and has a dividend yield of 26.0%. SEI Investments pays out 18.5% of its earnings in the form of a dividend. Great Elm Capital Group pays out -64.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. SEI Investments has raised its dividend for 34 consecutive years and Great Elm Capital Group has raised its dividend for 2 consecutive years. Great Elm Capital Group is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk and Volatility

SEI Investments has a beta of 0.96, indicating that its share price is 4% less volatile than the S&P 500. Comparatively, Great Elm Capital Group has a beta of 0.64, indicating that its share price is 36% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for SEI Investments and Great Elm Capital Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SEI Investments	0	2	7	0	2.78
Great Elm Capital Group	2	2	0	0	1.50

SEI Investments presently has a consensus target price of $109.67, suggesting a potential upside of 34.66%. Great Elm Capital Group has a consensus target price of $10.50, suggesting a potential upside of 84.21%. Given Great Elm Capital Group’s higher probable upside, analysts clearly believe Great Elm Capital Group is more favorable than SEI Investments.

Earnings & Valuation

This table compares SEI Investments and Great Elm Capital Group”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SEI Investments	$2.30 billion	4.33	$715.30 million	$5.63	14.47
Great Elm Capital Group	$49.99 million	1.60	-$31.79 million	($2.30)	-2.48

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
SEI Investments	31.14%	30.26%	25.33%
Great Elm Capital Group	-63.59%	13.19%	4.55%

Insider and Institutional Ownership

70.6% of SEI Investments shares are owned by institutional investors. Comparatively, 38.8% of Great Elm Capital Group shares are owned by institutional investors. 14.3% of SEI Investments shares are owned by company insiders. Comparatively, 8.7% of Great Elm Capital Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

SEI Investments beats Great Elm Capital Group on 14 of the 17 factors compared between the two stocks.

About SEI Investments

SEI Investments Company is a publicly owned asset management holding company. Through its subsidiaries, the firm provides wealth management, retirement and investment solutions, asset management, asset administration, investment processing outsourcing solutions, financial services, and investment advisory services to its clients. It provides its services to private banks, independent financial advisers, institutional investors, investment managers, investment advisors, wealth management organizations, corporations, retirement scheme sponsors, not-for-profit organizations, hedge fund managers, registered investment advisers, independent broker-dealers, financial planners, life insurance agents, defined-benefit schemes, defined-contribution schemes, endowments, foundations, and board-designated fund, through its subsidiaries. Through its subsidiaries, the firm manages separate client-focused portfolios. It also launches and manages equity, fixed income, and balanced mutual funds, through its subsidiaries. Through its subsidiaries, the firm invests in public equity and fixed income markets. It employs fundamental and quantitative analysis with a focus on top-down and bottom-up analysis to make its investments, through its subsidiaries. SEI Investments Company was founded in 1968 and is based in Oaks, Pennsylvania.

About Great Elm Capital Group

Great Elm Capital Corp. is a business development company which specializes in loan and mezzanine, middle market investments. It invests in the debt instruments of middle market companies. 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.