Harvest Capital Credit (NASDAQ:HCAP) and CHINA MERCHANTS/ADR (OTCMKTS:CIHKY) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, earnings, profitability, analyst recommendations, institutional ownership, valuation and dividends.
Institutional & Insider Ownership
9.2% of Harvest Capital Credit shares are held by institutional investors. Comparatively, 0.0% of CHINA MERCHANTS/ADR shares are held by institutional investors. 9.3% of Harvest Capital Credit shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
This table compares Harvest Capital Credit and CHINA MERCHANTS/ADR’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Harvest Capital Credit||30.83%||7.86%||4.88%|
This is a summary of recent ratings and price targets for Harvest Capital Credit and CHINA MERCHANTS/ADR, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Harvest Capital Credit||0||1||0||0||2.00|
Harvest Capital Credit presently has a consensus target price of $12.00, suggesting a potential upside of 17.65%. Given Harvest Capital Credit’s higher possible upside, analysts clearly believe Harvest Capital Credit is more favorable than CHINA MERCHANTS/ADR.
Valuation & Earnings
This table compares Harvest Capital Credit and CHINA MERCHANTS/ADR’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Harvest Capital Credit||$18.70 million||3.49||$1.63 million||$1.28||7.97|
|CHINA MERCHANTS/ADR||$46.95 billion||0.45||$10.38 billion||N/A||N/A|
CHINA MERCHANTS/ADR has higher revenue and earnings than Harvest Capital Credit.
Harvest Capital Credit pays an annual dividend of $0.96 per share and has a dividend yield of 9.4%. CHINA MERCHANTS/ADR pays an annual dividend of $0.53 per share and has a dividend yield of 2.3%. Harvest Capital Credit pays out 75.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Risk and Volatility
Harvest Capital Credit has a beta of 0.71, meaning that its stock price is 29% less volatile than the S&P 500. Comparatively, CHINA MERCHANTS/ADR has a beta of 1.52, meaning that its stock price is 52% more volatile than the S&P 500.
Harvest Capital Credit beats CHINA MERCHANTS/ADR on 7 of the 13 factors compared between the two stocks.
Harvest Capital Credit Company Profile
Harvest Capital Credit Corporation is a business development company providing structured credit to small businesses and specializing in leveraged buyouts, add-on acquisitions, recapitalizations, growth financings and debt refinancing investments. It prefers to invest in North America-based companies. The firm invest in multiple layers of a company's capital structure, from senior secured debt to subordinated debt and minority equity capital. The firm typically invests in companies with target equity size of $250k to $1 million and target loan size of $2 million to $15 million, having revenue between $10 million and $100 million with at least $1.5 million of annual EBITDA. Harvest Capital Credit Corporation was founded in 2012 and is based in New York, New York.
CHINA MERCHANTS/ADR Company Profile
China Merchants Bank Co., Ltd. provides various wholesale and retail banking products and services in the People's Republic of China and internationally. It operates through Wholesale Finance Business, Retail Finance Business, and Other Business segments. The company offers time, demand, call, notice, and RMB deposits; and deposit, current, and capital accounts. It also provides personal commercial real estate, consumption, housing, and car loans, as well as loans to finance for studying abroad; micro-business, combo, guarantee, and housing mortgage loans; mortgage loans for equipment; bank acceptance, discount, liquid capital, and fixed asset loans; and financial leasing, third-party payment, and guarantee services, as well as loans for vessels. In addition, the company offers investment and wealth management, and insurance products; individual forex option and express, and gold trading services; open ended funds; private banking and cash management services; and financial consultation, debt financing underwriting, merger and acquisition financing, and equity financing and enterprise listing services. Further, it provides settlement and trade chain financing services; international business, wealth investment, risk and financial management, cross border RMB financing, international factoring and settlement, oversea financing, and trade finance services; and forfeiting and risk participation, cross border RMB clearing, interbank business, and escrow services. Additionally, the company offers instruments; custody and pension services; credit cards; and Internet and mobile banking services. As of December 31, 2017, it had 137 branches; 1,681 sub-branches; 1 branch-level operation center; 1 representative office; 3,340 self-service centers; 11,382 self-service machines, including 1,610 automatic teller machines, and 9,772 deposit-taking and cash withdrawal machines; and 12,936 visual counters. The company was founded in 1987 and is headquartered in Shenzhen, China.
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