Main Street Capital (NYSE:MAIN) vs. Oppenheimer (NYSE:OPY) Head to Head Review

Main Street Capital (NYSE:MAIN) and Oppenheimer (NYSE:OPY) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, institutional ownership, dividends, risk, earnings, analyst recommendations and profitability.

Analyst Ratings

This is a summary of recent ratings for Main Street Capital and Oppenheimer, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Main Street Capital	0	6	4	0	2.40
Oppenheimer	0	0	2	0	3.00

Main Street Capital currently has a consensus target price of $60.83, indicating a potential upside of 8.56%. Given Main Street Capital’s higher probable upside, analysts clearly believe Main Street Capital is more favorable than Oppenheimer.

Dividends

Main Street Capital pays an annual dividend of $3.18 per share and has a dividend yield of 5.7%. Oppenheimer pays an annual dividend of $0.80 per share and has a dividend yield of 0.7%. Main Street Capital pays out 64.1% of its earnings in the form of a dividend. Oppenheimer pays out 9.0% 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. Main Street Capital has raised its dividend for 4 consecutive years and Oppenheimer has raised its dividend for 1 consecutive years. Main Street Capital is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares Main Street Capital and Oppenheimer”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Main Street Capital	$566.39 million	9.25	$493.40 million	$4.96	11.30
Oppenheimer	$1.64 billion	0.74	$148.40 million	$8.86	12.77

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

Risk and Volatility

Main Street Capital has a beta of 0.72, meaning that its stock price is 28% less volatile than the S&P 500. Comparatively, Oppenheimer has a beta of 1.1, meaning that its stock price is 10% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Main Street Capital	78.49%	11.80%	6.32%
Oppenheimer	5.72%	19.51%	4.86%

Insider & Institutional Ownership

20.3% of Main Street Capital shares are owned by institutional investors. Comparatively, 32.3% of Oppenheimer shares are owned by institutional investors. 3.8% of Main Street Capital shares are owned by insiders. Comparatively, 34.9% of Oppenheimer shares are owned 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.

Summary

Oppenheimer beats Main Street Capital on 9 of the 17 factors compared between the two stocks.

About Main Street Capital

Main Street Capital Corporation is a business development company specializes in equity capital to lower middle market companies. The firm specializing in recapitalizations, management buyouts, refinancing, family estate planning, management buyouts, refinancing, industry consolidation, mature, later stage emerging growth. The firm also provides debt capital to middle market companies for acquisitions, management buyouts, growth financings, recapitalizations, and refinancing. The firm seeks to partner with entrepreneurs, business owners and management teams and generally provides “one stop” financing alternatives within its lower middle market portfolio. It prefers to invest in air freight and logistics, auto components, building products, chemicals, commercial services, computers, construction and engineering, consumer finance, consumer services, electronic equipment, energy equipment and services, financial services, health care equipment, health care providers, hotels, restaurants, and leisure, internet software and services, IT Services, machinery, oil, gas and consumable fuels, paper and forest products, professional and industrial services, road and rail, software, specialty retail, telecommunication, consumer discretionary, energy, materials, technology, and transportation. The firm typically invests in lower middle market companies generally with annual revenues between $10 million and $150 million. It prefers to invest in ranging between $5 million and $100 million in equity investment and enterprise value in ranging between $3 million and $20 million. The firm typically prefers to invest in the range of $5 million and $150 million per transaction in debt investment value and in the range of $3 million and $75 million in annual EBITDA in between $3 million and $25 million in lower middle market $5 million and $75 million in credit solution. The firm’s middle market debt investments are made in businesses that are generally larger in size than its lower middle market portfolio companies. It takes 5 percent minority and up to 50 percent majority equity investments. Main Street Capital Corporation was founded in 2007 and is based in Houston, Texas with an additional office in Chojnów, Poland.

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.