Stellus Capital Investment (NYSE:SCM) & Oppenheimer (NYSE:OPY) Financial Contrast

Stellus Capital Investment (NYSE:SCM) and Oppenheimer (NYSE:OPY) are both small-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, risk, earnings, institutional ownership, analyst recommendations, profitability and dividends.

Analyst Ratings

This is a summary of current recommendations and price targets for Stellus Capital Investment and Oppenheimer, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Stellus Capital Investment	1	2	1	0	2.00
Oppenheimer	0	0	2	0	3.00

Stellus Capital Investment currently has a consensus target price of $9.25, suggesting a potential upside of 35.83%. Given Stellus Capital Investment’s higher probable upside, equities analysts plainly believe Stellus Capital Investment is more favorable than Oppenheimer.

Valuation & Earnings

This table compares Stellus Capital Investment and Oppenheimer”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Stellus Capital Investment	$102.14 million	1.90	$27.05 million	$1.02	6.68
Oppenheimer	$1.64 billion	0.66	$148.40 million	$8.86	11.48

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

Institutional and Insider Ownership

13.2% of Stellus Capital Investment shares are held by institutional investors. Comparatively, 32.3% of Oppenheimer shares are held by institutional investors. 4.2% of Stellus Capital Investment shares are held by insiders. Comparatively, 34.9% of Oppenheimer shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Risk and Volatility

Stellus Capital Investment has a beta of 0.71, suggesting that its stock price is 29% less volatile than the S&P 500. Comparatively, Oppenheimer has a beta of 1.1, suggesting that its stock price is 10% more volatile than the S&P 500.

Dividends

Stellus Capital Investment pays an annual dividend of $1.00 per share and has a dividend yield of 14.7%. Oppenheimer pays an annual dividend of $0.80 per share and has a dividend yield of 0.8%. Stellus Capital Investment pays out 98.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Oppenheimer pays out 9.0% of its earnings in the form of a dividend. Oppenheimer has increased its dividend for 1 consecutive years.

Profitability

This table compares Stellus Capital Investment and Oppenheimer’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Stellus Capital Investment	30.66%	9.09%	3.32%
Oppenheimer	5.72%	19.51%	4.86%

Summary

Oppenheimer beats Stellus Capital Investment on 13 of the 17 factors compared between the two stocks.

About Stellus Capital Investment

Stellus Capital Investment Corporation is a business development company specializing in investments in private middle-market companies. It invests through first lien, second lien, unitranche, and mezzanine debt financing, often with a corresponding equity investment. The fund prefers to invest in US and Canada. The fund seeks to invest in companies with an EBITDA between $5 million and $50 million.

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.