Financial Review: CION Investment (NYSE:CION) & Crescent Capital BDC (NASDAQ:CCAP)

CION Investment (NYSE:CION) and Crescent Capital BDC (NASDAQ:CCAP) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their dividends, risk, analyst recommendations, earnings, profitability, institutional ownership and valuation.

Analyst Ratings

This is a breakdown of recent recommendations for CION Investment and Crescent Capital BDC, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CION Investment	2	1	0	0	1.33
Crescent Capital BDC	0	4	2	0	2.33

CION Investment currently has a consensus target price of $6.50, indicating a potential downside of 3.63%. Crescent Capital BDC has a consensus target price of $14.30, indicating a potential upside of 28.48%. Given Crescent Capital BDC’s stronger consensus rating and higher possible upside, analysts plainly believe Crescent Capital BDC is more favorable than CION Investment.

Profitability

This table compares CION Investment and Crescent Capital BDC’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CION Investment	-0.41%	11.96%	4.64%
Crescent Capital BDC	9.26%	9.34%	4.04%

Dividends

CION Investment pays an annual dividend of $1.20 per share and has a dividend yield of 17.8%. Crescent Capital BDC pays an annual dividend of $1.68 per share and has a dividend yield of 15.1%. CION Investment pays out -3,000.0% of its earnings in the form of a dividend. Crescent Capital BDC pays out 409.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. CION Investment has raised its dividend for 1 consecutive years and Crescent Capital BDC has raised its dividend for 1 consecutive years. CION Investment is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility & Risk

CION Investment has a beta of 1.16, suggesting that its share price is 16% more volatile than the S&P 500. Comparatively, Crescent Capital BDC has a beta of 0.59, suggesting that its share price is 41% less volatile than the S&P 500.

Valuation and Earnings

This table compares CION Investment and Crescent Capital BDC”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CION Investment	$240.82 million	1.39	-$20.63 million	($0.04)	-168.63
Crescent Capital BDC	$167.29 million	2.45	$34.51 million	$0.41	27.15

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

Insider & Institutional Ownership

32.0% of CION Investment shares are held by institutional investors. Comparatively, 49.5% of Crescent Capital BDC shares are held by institutional investors. 0.6% of CION Investment shares are held by insiders. Comparatively, 1.2% of Crescent Capital BDC shares are held by 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.

Summary

Crescent Capital BDC beats CION Investment on 10 of the 16 factors compared between the two stocks.

About CION Investment

CION Investment Corporation is a business development company. It specializes in investments in senior secured loans, including unitranche loans, First Lien, second lien loans, long-term subordinated loans, and mezzanine loans; equity interests such as warrants or options; and corporate bonds; and other debt securities in middle-market companies. The firm invests in growth capital, acquisitions, leveraged buyouts, market/product expansion, refinancing and recapitalization. The fund also invests up to 30 percent of their assets opportunistically in other types of investments, including the securities of larger public companies and foreign securities. It also makes investments in the secondary loan market. The fund does not invest in start-up companies, turnaround situations, or companies with speculative business plans. The fund prefers to invest in high tech industries, healthcare, pharmaceuticals, business services, media, chemicals, plastic, rubber, telecommunication, consumer services, advertising, printing and publishing, consumer goods, durables, diversified financials, and other industries. It also invests in homebuilding, restaurants, beverage and tobacco bars, broadcasting, distributors, Non-durable good distribution, food beverage and tobacco, energy, oil gas and consumables fuels, insurance, aerospace and defense, industrial machinery, paper and forest product machinery, information technology, metals and mining, and real estate. It primarily seeks to invest in the United States. The fund seeks to invest between $5 million and $50 million in companies with an EBITDA between $25 million and $75 million with average targeted hold of $25 million. It also purchases minority interests in the form of common or preferred equity in the target companies, typically in conjunction with its debt investments or through a co-investment with a financial sponsor. The fund seeks to exit its investments through an initial public offering of common stock, a merger, a sale, or other recapitalization.

About Crescent Capital BDC

Crescent Capital BDC, Inc. is as a business development company private equity / buyouts and loan fund. It specializes in directly investing. It specializes in middle market. The fund seeks to invest in United States.