Reviewing Stellus Capital Investment (NYSE:SCM) & Invent Ventures (OTCMKTS:IDEA)

Stellus Capital Investment (NYSE:SCM) and Invent Ventures (OTCMKTS:IDEA) are both small-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their profitability, dividends, risk, earnings, analyst recommendations, valuation and institutional ownership.

Profitability

This table compares Stellus Capital Investment and Invent Ventures’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Stellus Capital Investment	38.24%	11.06%	4.12%
Invent Ventures	91.12%	N/A	N/A

Insider & Institutional Ownership

13.2% of Stellus Capital Investment shares are owned by institutional investors. 4.0% of Stellus Capital Investment shares are owned by company insiders. Comparatively, 19.4% of Invent Ventures shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Volatility and Risk

Stellus Capital Investment has a beta of 0.86, indicating that its share price is 14% less volatile than the S&P 500. Comparatively, Invent Ventures has a beta of -50.09, indicating that its share price is 5,109% less volatile than the S&P 500.

Earnings and Valuation

This table compares Stellus Capital Investment and Invent Ventures”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Stellus Capital Investment	$104.74 million	3.94	$45.85 million	$1.45	10.02
Invent Ventures	$790,000.00	1.52	$710,000.00	N/A	N/A

Stellus Capital Investment has higher revenue and earnings than Invent Ventures.

Analyst Recommendations

This is a breakdown of recent recommendations for Stellus Capital Investment and Invent Ventures, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Stellus Capital Investment	0	1	0	0	2.00
Invent Ventures	0	0	0	0	0.00

Stellus Capital Investment currently has a consensus price target of $13.00, suggesting a potential downside of 10.49%. Given Stellus Capital Investment’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Stellus Capital Investment is more favorable than Invent Ventures.

Summary

Stellus Capital Investment beats Invent Ventures on 9 of the 11 factors compared between the two stocks.

About Stellus Capital Investment

Stellus Capital Investment Corporation is a business development company specializing in investments in private middle-market companies. It invests through first lien, second lien, unitranche, and mezzanine debt financing, often with a corresponding equity investment. The fund prefers to invest in US and Canada. The fund seeks to invest in companies with an EBITDA between $5 million and $50 million.

About Invent Ventures

Invent Ventures, Inc., formerly known as Los Angeles Syndicate of Technology, Inc., is venture capital firm specializing in incubation, seed, start ups, growth capital, and early stage investments. The firm prefers to invest in technology companies including web-based software, digital media, mobile applications, social media, consumer internet, online advertising and healthcare technology . It prefers to invest in the Los Angeles area of United States. The firm seeks to invest up to $0.25 million. Invent Ventures, Inc. was founded on August 18, 2005 and is based in Santa Monica, California.