Portman Ridge Finance (NASDAQ:BCIC) vs. Elme Communities (NYSE:ELME) Financial Analysis

Portman Ridge Finance (NASDAQ:BCIC) and Elme Communities (NYSE:ELME) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, earnings, risk, profitability, valuation, analyst recommendations and dividends.

Earnings & Valuation

This table compares Portman Ridge Finance and Elme Communities”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Portman Ridge Finance	$61.15 million	1.44	$11.49 million	($0.55)	-12.91
Elme Communities	$206.36 million	0.76	-$154.16 million	($1.52)	-1.15

Portman Ridge Finance has higher earnings, but lower revenue than Elme Communities. Portman Ridge Finance is trading at a lower price-to-earnings ratio than Elme Communities, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

30.1% of Portman Ridge Finance shares are held by institutional investors. Comparatively, 87.9% of Elme Communities shares are held by institutional investors. 1.3% of Portman Ridge Finance shares are held by insiders. Comparatively, 1.4% of Elme Communities shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings for Portman Ridge Finance and Elme Communities, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Portman Ridge Finance	2	3	0	0	1.60
Elme Communities	1	2	0	0	1.67

Portman Ridge Finance currently has a consensus price target of $9.25, indicating a potential upside of 30.28%. Elme Communities has a consensus price target of $18.00, indicating a potential upside of 925.64%. Given Elme Communities’ stronger consensus rating and higher possible upside, analysts plainly believe Elme Communities is more favorable than Portman Ridge Finance.

Risk and Volatility

Portman Ridge Finance has a beta of 0.53, meaning that its stock price is 47% less volatile than the S&P 500. Comparatively, Elme Communities has a beta of 0.73, meaning that its stock price is 27% less volatile than the S&P 500.

Profitability

This table compares Portman Ridge Finance and Elme Communities’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Portman Ridge Finance	-5.72%	14.09%	5.44%
Elme Communities	N/A	N/A	N/A

Summary

Elme Communities beats Portman Ridge Finance on 7 of the 13 factors compared between the two stocks.

About Portman Ridge Finance

Portman Ridge Finance Corporation is a business development company specializing in investments in unitranche loans (including last out), first lien loans, second lien loans, subordinated debt, equity co-investment, buyout in middle market companies. It also makes acquisitions in businesses complementary to the firm’s business. It primarily invests in healthcare, cargo transport, manufacturing, industrial & environmental services, logistics & distribution, media & telecommunications, real estate, education, automotive, agriculture, aerospace/defense, packaging, electronics, finance, non-durable consumer, consumer products, business services, utilities, insurance, and food and beverage sectors. The fund typically invests $1 million to $20 million in its portfolio companies. It provides senior secured term loans from $2 million to $20 million maturing in five to seven years; second lien term loans from $5 million to $15 million maturing in six to eight years; senior unsecured loans $5 million to $23 million maturing in six to eight years; mezzanine loans from $5 million to $15 million maturing in seven to ten years; and equity investments from $1 to $5 million. The fund targets the companies with EBITDA between $5 million and $25 million. While investing in debt securities, it invests in those middle market firms with EBITDA between $10 million and $50 million and/or total debt between $25 million and $150 million. It invests in minority, and majority or control equity positions alongside its private equity sponsor partners.

About Elme Communities

Elme Communities is committed to elevating what home can be for middle-income renters by providing a higher level of quality, service, and experience. The Company is a multifamily real estate investment trust that owns and operates approximately 9,400 apartment homes in the Washington, DC metro and the Atlanta metro regions, and owns approximately 300,000 square feet of commercial space. Focused on providing quality, affordable homes to a deep, solid, and underserved base of mid-market demand, Elme Communities is building long-term value for shareholders.