OFS Credit (NASDAQ:OCCI) vs. Sprott (NYSE:SII) Critical Comparison

OFS Credit (NASDAQ:OCCI) and Sprott (NYSE:SII) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, earnings, risk, analyst recommendations, dividends, institutional ownership and profitability.

Dividends

OFS Credit pays an annual dividend of $1.30 per share and has a dividend yield of 38.2%. Sprott pays an annual dividend of $1.60 per share and has a dividend yield of 1.2%. OFS Credit pays out -99.2% of its earnings in the form of a dividend. Sprott pays out 48.9% 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. Sprott has raised its dividend for 1 consecutive years. OFS Credit is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings and Valuation

This table compares OFS Credit and Sprott”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
OFS Credit	$44.15 million	2.24	-$38.11 million	($1.31)	-2.60
Sprott	$285.08 million	11.70	$67.35 million	$3.27	39.58

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

Insider and Institutional Ownership

23.8% of OFS Credit shares are held by institutional investors. Comparatively, 28.3% of Sprott shares are held by institutional investors. 1.0% of OFS Credit shares are held by insiders. Comparatively, 18.3% of Sprott shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Risk and Volatility

OFS Credit has a beta of 0.66, indicating that its stock price is 34% less volatile than the S&P 500. Comparatively, Sprott has a beta of 0.78, indicating that its stock price is 22% less volatile than the S&P 500.

Profitability

This table compares OFS Credit and Sprott’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
OFS Credit	N/A	N/A	N/A
Sprott	21.99%	23.54%	17.48%

Analyst Ratings

This is a breakdown of recent ratings for OFS Credit and Sprott, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
OFS Credit	0	0	0	0	0.00
Sprott	0	1	2	0	2.67

Sprott has a consensus target price of $230.00, indicating a potential upside of 77.71%. Given Sprott’s stronger consensus rating and higher probable upside, analysts plainly believe Sprott is more favorable than OFS Credit.

Summary

Sprott beats OFS Credit on 15 of the 17 factors compared between the two stocks.

About OFS Credit

OFS Credit Company, Inc. is a fund of OFS Advisor.

About Sprott

Sprott Inc. is a publicly owned asset management holding company. Through its subsidiaries, the firm provides asset management, portfolio management, wealth management, fund management, and administrative and consulting services to its clients. It offers mutual funds, hedge funds, and offshore funds, along with managed accounts. Further, the firm also provides broker-dealer activities. Sprott Inc. was formed on February 13, 2008 and is based in Toronto, Canada.