Contrasting NewtekOne (NASDAQ:NEWT) and Pearl Diver Credit (NYSE:PDCC)

NewtekOne (NASDAQ:NEWT) and Pearl Diver Credit (NYSE:PDCC) are both small-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, earnings, dividends, institutional ownership, risk, profitability and valuation.

Dividends

NewtekOne pays an annual dividend of $0.76 per share and has a dividend yield of 6.5%. Pearl Diver Credit pays an annual dividend of $2.64 per share and has a dividend yield of 15.0%. NewtekOne pays out 37.8% of its earnings in the form of a dividend. NewtekOne has raised its dividend for 1 consecutive years.

Institutional and Insider Ownership

38.4% of NewtekOne shares are held by institutional investors. 6.7% of NewtekOne shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares NewtekOne and Pearl Diver Credit’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NewtekOne	14.65%	19.16%	2.67%
Pearl Diver Credit	N/A	N/A	N/A

Earnings and Valuation

This table compares NewtekOne and Pearl Diver Credit”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NewtekOne	$338.73 million	0.91	$50.85 million	$2.01	5.80
Pearl Diver Credit	$8.44 million	13.52	N/A	N/A	N/A

NewtekOne has higher revenue and earnings than Pearl Diver Credit.

Analyst Ratings

This is a breakdown of recent ratings and price targets for NewtekOne and Pearl Diver Credit, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NewtekOne	0	4	0	0	2.00
Pearl Diver Credit	0	0	0	1	4.00

NewtekOne currently has a consensus target price of $13.00, indicating a potential upside of 11.49%. Pearl Diver Credit has a consensus target price of $19.50, indicating a potential upside of 10.51%. Given NewtekOne’s higher probable upside, research analysts plainly believe NewtekOne is more favorable than Pearl Diver Credit.

Risk and Volatility

NewtekOne has a beta of 1.25, indicating that its share price is 25% more volatile than the S&P 500. Comparatively, Pearl Diver Credit has a beta of 0.37, indicating that its share price is 63% less volatile than the S&P 500.

Summary

NewtekOne beats Pearl Diver Credit on 9 of the 14 factors compared between the two stocks.

About NewtekOne

NewtekOne, Inc. operates as the bank holding company for Newtek Bank, National Association that engages in the provision of various business and financial solutions under the Newtek brand name to the small- and medium-sized business market. The company accepts demand, savings, NOW, money market, and time deposits; and provides loans including SBA loans, commercial and industrial loans, and commercial real estate loans. It is also involved in the provision of electronic payment processing services comprising credit and debit card processing services, check approval services, processing equipment, and software, as well as cloud-based Point of Sale systems for a various restaurant, retail, assisted living, taxi cabs, parks, and golf course businesses. In addition, it offers wholesale brokerage insurance agency services; and payroll management, and related payment and tax reporting services to independent business owners. Further, the company provides website hosting, dedicated server hosting, cloud hosting, web design and development, internet marketing, ecommerce, data storage, backup and disaster recovery, and other related services, including consulting and implementing technology solutions for enterprise and commercial clients as well as SMBs. The company was formerly known as Newtek Business Services Corp. and changed its name to NewtekOne, Inc. in January 2023. NewtekOne, Inc. was founded in 1998 and is headquartered in Boca Raton, Florida.

About Pearl Diver Credit

Pearl Diver Credit Company Inc. is a newly organized, externally managed, non-diversified, closed-end management investment company. Its primary investment objective is to maximize its portfolio’s total return, with a secondary objective of generating high current income. Pearl Diver Credit Company Inc. is based in NEW YORK.