Contrasting Stifel Financial (NYSE:SF) & Great Elm Capital Group (NASDAQ:GECC)

Great Elm Capital Group (NASDAQ:GECC) and Stifel Financial (NYSE:SF) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, risk, valuation, institutional ownership, profitability, dividends and analyst recommendations.

Risk and Volatility

Great Elm Capital Group has a beta of 0.78, suggesting that its share price is 22% less volatile than the S&P 500. Comparatively, Stifel Financial has a beta of 0.98, suggesting that its share price is 2% less volatile than the S&P 500.

Dividends

Great Elm Capital Group pays an annual dividend of $1.00 per share and has a dividend yield of 19.4%. Stifel Financial pays an annual dividend of $1.36 per share and has a dividend yield of 1.9%. Great Elm Capital Group pays out -33.9% of its earnings in the form of a dividend. Stifel Financial pays out 24.3% 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 raised its dividend for 2 consecutive years and Stifel Financial has raised its dividend for 9 consecutive years. Great Elm Capital Group is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation & Earnings

This table compares Great Elm Capital Group and Stifel Financial”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Great Elm Capital Group	$49.99 million	1.43	-$31.79 million	($2.95)	-1.75
Stifel Financial	$5.86 billion	1.81	$683.78 million	$5.59	12.58

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

Analyst Ratings

This is a breakdown of recent recommendations for Great Elm Capital Group and Stifel Financial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Great Elm Capital Group	1	3	0	0	1.75
Stifel Financial	0	4	5	0	2.56

Great Elm Capital Group currently has a consensus target price of $10.50, indicating a potential upside of 103.49%. Stifel Financial has a consensus target price of $91.90, indicating a potential upside of 30.67%. Given Great Elm Capital Group’s higher probable upside, analysts plainly believe Great Elm Capital Group is more favorable than Stifel Financial.

Institutional & Insider Ownership

38.8% of Great Elm Capital Group shares are held by institutional investors. Comparatively, 82.0% of Stifel Financial shares are held by institutional investors. 3.9% of Great Elm Capital Group shares are held by company insiders. Comparatively, 3.4% of Stifel Financial shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Great Elm Capital Group	-87.74%	13.87%	4.93%
Stifel Financial	16.11%	19.22%	2.36%

Summary

Stifel Financial beats Great Elm Capital Group on 12 of the 17 factors compared between the two stocks.

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.

About Stifel Financial

Stifel Financial Corp., a financial services and bank holding company, provides retail and institutional wealth management, and investment banking services to individual investors, corporations, municipalities, and institutions in the United States and internationally. It operates in three segments: Global Wealth Management, Institutional Group, and Other. The company provides private client services, including securities transaction and financial planning services; institutional equity and fixed income sales, trading and research, and municipal finance services; investment banking services, such as mergers and acquisitions, public offerings, and private placements; and retail and commercial banking services comprising personal and commercial lending programs, as well as deposit accounts. It participates in and manages underwritings for corporate and public finance; and offers financial advisory and securities brokerage services. The company was founded in 1890 and is headquartered in Saint Louis, Missouri.