Critical Review: Oppenheimer (NYSE:OPY) vs. Eagle Point Credit (NYSE:ECC)

Oppenheimer (NYSE:OPY) and Eagle Point Credit (NYSE:ECC) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their risk, analyst recommendations, valuation, profitability, earnings, institutional ownership and dividends.

Dividends

Oppenheimer pays an annual dividend of $0.80 per share and has a dividend yield of 0.9%. Eagle Point Credit pays an annual dividend of $1.04 per share and has a dividend yield of 39.6%. Oppenheimer pays out 10.8% of its earnings in the form of a dividend. Eagle Point Credit pays out 170.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Oppenheimer has increased its dividend for 1 consecutive years.

Profitability

This table compares Oppenheimer and Eagle Point Credit’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Oppenheimer	4.94%	19.02%	4.75%
Eagle Point Credit	-84.29%	-1.83%	-0.99%

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Oppenheimer and Eagle Point Credit, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Oppenheimer	0	0	3	0	3.00
Eagle Point Credit	0	2	2	0	2.50

Eagle Point Credit has a consensus price target of $3.75, suggesting a potential upside of 42.86%. Given Eagle Point Credit’s higher possible upside, analysts plainly believe Eagle Point Credit is more favorable than Oppenheimer.

Institutional & Insider Ownership

32.3% of Oppenheimer shares are owned by institutional investors. Comparatively, 19.5% of Eagle Point Credit shares are owned by institutional investors. 34.9% of Oppenheimer shares are owned by insiders. Comparatively, 0.3% of Eagle Point Credit shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Oppenheimer and Eagle Point Credit”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Oppenheimer	$1.64 billion	0.60	$148.40 million	$7.43	12.27
Eagle Point Credit	-$158.23 million	-2.19	-$115.00 million	$0.61	4.30

Oppenheimer has higher revenue and earnings than Eagle Point Credit. Eagle Point Credit is trading at a lower price-to-earnings ratio than Oppenheimer, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Oppenheimer has a beta of 1.12, suggesting that its stock price is 12% more volatile than the S&P 500. Comparatively, Eagle Point Credit has a beta of 0.4, suggesting that its stock price is 60% less volatile than the S&P 500.

Summary

Oppenheimer beats Eagle Point Credit on 15 of the 17 factors compared between the two stocks.

About Oppenheimer

Oppenheimer Holdings Inc. operates as a middle-market investment bank and full-service broker-dealer in the Americas, Europe, the Middle East, and Asia. The company provides brokerage services covering corporate equity and debt securities, money market instruments, exchange-traded options and futures contracts, municipal bonds, mutual funds, exchange-traded funds, and unit investment trusts; financial and wealth planning services; and margin lending services. It offers asset management services, including separately managed accounts, mutual fund managed accounts, discretionary portfolio management programs, non-discretionary investment advisory and consultation services, alternative investments, portfolio enhancement programs, and institutional taxable fixed income portfolio management strategies and solutions, as well as taxable and non-taxable fixed income portfolios and strategies. In addition, the company offers investment banking services, such as strategic advisory services and capital markets products; merger and acquisition, equities capital market, debt capital market, debt advisory and restructuring, and fund placement services; and institutional equity sales and trading, equity research, equity derivatives and index options, convertible bonds, event driven sales and trading, and portfolio and electronic trading. Further, it provides institutional fixed income sales and trading, fixed income research, public finance, and municipal trading services; and proprietary trading and investment activities. Additionally, the company offers underwriting, market-making, trust, and discount services, as well as a cloud-based financial market. It serves high-net-worth individuals and families, corporate executives, public and private businesses, institutions and corporations, governments, financial sponsors, and domestic and international investors. Oppenheimer Holdings Inc. was founded in 1881 and is headquartered in New York, New York.

About Eagle Point Credit

Eagle Point Credit Company Inc. is a closed ended fund launched and managed by Eagle Point Credit Management LLC. It invests in fixed income markets of the United States. The fund invests equity and junior debt tranches of collateralized loan obligations consisting primarily of below investment grade U.S. senior secured loans. Eagle Point Credit Company Inc. was formed on March 24, 2014 and is domiciled in the United States.