Royalty Management (NASDAQ:RMCO) vs. Great Elm Capital Group (NASDAQ:GECC) Financial Contrast

Royalty Management (NASDAQ:RMCO) and Great Elm Capital Group (NASDAQ:GECC) are both small-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, profitability, analyst recommendations, earnings and risk.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Royalty Management and Great Elm Capital Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Royalty Management	1	1	1	0	2.00
Great Elm Capital Group	1	2	0	0	1.67

Great Elm Capital Group has a consensus target price of $10.50, suggesting a potential upside of 39.26%. Given Great Elm Capital Group’s higher probable upside, analysts plainly believe Great Elm Capital Group is more favorable than Royalty Management.

Risk and Volatility

Royalty Management has a beta of -0.06, meaning that its stock price is 106% less volatile than the S&P 500. Comparatively, Great Elm Capital Group has a beta of 0.9, meaning that its stock price is 10% less volatile than the S&P 500.

Dividends

Royalty Management pays an annual dividend of $0.01 per share and has a dividend yield of 0.3%. Great Elm Capital Group pays an annual dividend of $1.48 per share and has a dividend yield of 19.6%. Royalty Management pays out -100.0% of its earnings in the form of a dividend. Great Elm Capital Group pays out -264.3% 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. Great Elm Capital Group has increased its dividend for 2 consecutive years. Great Elm Capital Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Royalty Management and Great Elm Capital Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Royalty Management	-9.22%	-2.94%	-2.13%
Great Elm Capital Group	-17.08%	10.97%	3.95%

Institutional and Insider Ownership

67.2% of Royalty Management shares are owned by institutional investors. Comparatively, 38.8% of Great Elm Capital Group shares are owned by institutional investors. 57.1% of Royalty Management shares are owned by company insiders. Comparatively, 8.7% of Great Elm Capital Group shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Royalty Management and Great Elm Capital Group”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Royalty Management	$810,000.00	56.19	-$110,000.00	($0.01)	-309.00
Great Elm Capital Group	$39.32 million	2.68	$3.55 million	($0.56)	-13.46

Great Elm Capital Group has higher revenue and earnings than Royalty Management. Royalty Management is trading at a lower price-to-earnings ratio than Great Elm Capital Group, indicating that it is currently the more affordable of the two stocks.

Summary

Great Elm Capital Group beats Royalty Management on 10 of the 17 factors compared between the two stocks.

About Royalty Management

Royalty Management Holding Corporation provides environmental consulting and services in the United States. It is also involved in investing or purchasing assets, such as real estate and mining permits, patents, intellectual property, and emerging technologies. The company was incorporated in 2021 and is based in Fishers, Indiana.

About Great Elm Capital Group

Great Elm Capital Corp. is a business development company which specializes in loan and mezzanine, middle market investments. It invests in the debt instruments of middle market companies. The fund prefers to invest in media, commercial services and supplies, healthcare, telecommunication services, communications equipment. It typically makes equity investments between $3 million and $10 million in companies with revenues between $3 million and $75 million.