Eagle Point Credit (NYSE:ECC) vs. Westwood Holdings Group (NYSE:WHG) Financial Analysis

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

Earnings & Valuation

This table compares Westwood Holdings Group and Eagle Point Credit”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Westwood Holdings Group	$96.24 million	1.52	$2.21 million	$0.82	18.98
Eagle Point Credit	$179.77 million	3.89	$85.49 million	$0.19	29.13

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

Insider & Institutional Ownership

56.6% of Westwood Holdings Group shares are held by institutional investors. Comparatively, 19.5% of Eagle Point Credit shares are held by institutional investors. 8.2% of Westwood Holdings Group shares are held by insiders. Comparatively, 0.2% of Eagle Point Credit shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Volatility & Risk

Westwood Holdings Group has a beta of 0.95, indicating that its stock price is 5% less volatile than the S&P 500. Comparatively, Eagle Point Credit has a beta of 0.37, indicating that its stock price is 63% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Westwood Holdings Group	3.92%	5.19%	4.33%
Eagle Point Credit	12.33%	13.53%	8.26%

Analyst Ratings

This is a breakdown of recent ratings and target prices for Westwood Holdings Group and Eagle Point Credit, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Westwood Holdings Group	0	0	1	0	3.00
Eagle Point Credit	0	2	3	1	2.83

Eagle Point Credit has a consensus price target of $7.46, suggesting a potential upside of 34.75%. Given Eagle Point Credit’s higher probable upside, analysts plainly believe Eagle Point Credit is more favorable than Westwood Holdings Group.

Dividends

Westwood Holdings Group pays an annual dividend of $0.60 per share and has a dividend yield of 3.9%. Eagle Point Credit pays an annual dividend of $1.68 per share and has a dividend yield of 30.4%. Westwood Holdings Group pays out 73.2% of its earnings in the form of a dividend. Eagle Point Credit pays out 884.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

Eagle Point Credit beats Westwood Holdings Group on 10 of the 17 factors compared between the two stocks.

About Westwood Holdings Group

Westwood Holdings Group, Inc., through its subsidiaries, manages investment assets and provides services for its clients. The company operates in two segments, Advisory and Trust. The Advisory segment provides investment advisory services to corporate retirement plans, public retirement plans, endowments, foundations, individuals, and the Westwood Funds; and investment sub-advisory services to mutual funds, pooled investment vehicles, and its Trust segment. The Trust segment offers trust and custodial services; and participates in common trust funds that it sponsors to institutions and high net worth individuals. Westwood Holdings Group, Inc. was founded in 1983 and is based in Dallas, Texas.

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.